Henkel Aktie

Good morning, and welcome to Henkel conference call. [Operator Instructions]

I would now like to turn the conference over to Leslie Iltgen, Head of Investor Relations. Please go ahead, madam.

Thank you. Good morning, and a warm welcome to everyone joining Henkel's Half Year 2026 Results Conference Call today. I'm Leslie Iltgen, Head of Investor Relations at Henkel. Today, I'm joined by our CEO, Carsten Knobel; and our CFO, Marco Swoboda. Carsten will begin with an overview of the key developments in the first half. Marco will then follow with a more detailed review of the company's financial performance. As always, following the presentation, we will open up the lines, and Carsten and Marco will be happy to take your questions.

Before handing over to Carsten, please let me remind you that this call will be recorded, and a replay will be made available on our Investor Relations website shortly after this call. By asking a question during the Q&A session, you agree to both the live broadcasting as well as the recording of your question, including salutation to be published on our website.

Also, please be reminded that this presentation contains the usual formal disclaimer in regard to forward-looking statements within the meaning of relevant U.S. legislation. It can also be accessed via our website at henkel.com. As always, the presentation and discussion are conducted subject to this disclaimer.

With this, it is my pleasure to hand over to our CEO, Carsten Knobel. Carsten, please go ahead.

Thank you, Leslie, and a warm welcome also from my side to everyone joining our conference call today. As always, we do appreciate your interest in our company, and we look forward to answering your questions. And after walking you through the key developments of the first 6 months, we will elaborate on Henkel's business performance and the full-year outlook in more detail. So let me move now straight to the highlights of the first half 2026.

In the first half, we delivered very strong performance on both the top and the bottom line. Organic sales growth showed a clear sequential acceleration in Q2 and came in at above 3% for the first half on Group level, backed by both business units, with Adhesive Technologies clearly standing out. We saw both, positive price and volume dynamics, in our 2 business units.

In Adhesive Technologies, the team was able to swiftly execute pricing initiatives to offset the significant raw material price increases. We also delivered a strong EBIT margin, both on Group level and in the business units despite an overall highly challenging macroeconomic and geopolitical environment in which we are currently operating. This demonstrates the strength and the high quality of our businesses.

In addition, EPS at constant currency grew strongly by 7% versus the prior year. Furthermore, we accelerated the execution of our M&A growth strategy in both business units. Most recently, we have closed the acquisition of OLAPLEX. Overall, we expect first positive contributions from the acquisition on both top and bottom line in fiscal 2026.

And finally, turning to our updated full year 2026 guidance. We upgraded our top line expectations for the Group and Adhesive Technologies on the back of the strong H1 performance, while our expectations for both the adjusted EBIT margin and the adjusted EPS growth at constant currencies remain unchanged. Overall, our strong business performance demonstrates that we have a clear strategy with our purposeful growth agenda that we have the right priorities and that we were able to accelerate the execution of our M&A growth strategy, thereby clearly strengthening our long-term competitiveness and position for future success.

As you are all aware, we continue to successfully deliver on our M&A growth strategy, which is an integral part of our overall growth strategy in both business units. With the recently announced acquisitions, we are investing a total of roughly EUR 5 billion, supported by future mid- to high single-digit organic sales growth, which is clearly above average. The combined sales of the 5 acquisitions are expected to increase to EUR 2 billion by 2030.

To date, we have already successfully closed 4 out of the 5 transactions, Wetherby Laroc and ATP Adhesive Systems in Adhesive Technologies, Not Your Mother's, and most recently, as mentioned before, OLAPLEX in Consumer Brands. We expect the Stahl acquisition to be closed in the course of the second half of fiscal 2026. And for sure, Marco will later provide you with more details on the expected M&A contribution for 2026 and beyond.

Let me highlight our most recently closed acquisition in Consumer Brands and Adhesive Technologies. With the acquisition of the premium hair care brand, OLAPLEX, adding around EUR 370 million in sales, we expand our global presence in the premium hair segment and are now ranked the global #2 in hair professional. The premium hair care market is a highly attractive market and is expected to continue its strong growth trajectory, reflected in a CAGR of around 5% for the coming years.

OLAPLEX is a well-established, globally active premium channel hair care brand, offering a portfolio of science-led, high-performance products. We are highly confident that we can significantly grow this business by making use of cross-selling opportunities and leveraging on both specialty retail and salons at distribution channels. In addition, OLAPLEX proprietary technologies offer attractive innovation opportunities, unlocking new growth potential through enhanced capabilities and accelerating product development across the portfolio.

Furthermore, OLAPLEX benefits from a global footprint, anchored by broad distribution in North America and supported by meaningful international reach. Overall, a promising and highly attractive asset that is now part of Henkel's Consumer Brands portfolio.

In Adhesive Technologies, we closed the acquisition of ATP Adhesive Systems effective April 1. The acquisition expands our portfolio into high-performance water-based specialty tapes, a highly attractive market growing at around 7% annually. With this acquisition, we add tapes to our technology platforms, thus expanding beyond liquids. ATP strengthens our innovation capabilities, creates attractive cross-selling opportunities and enhances our position as a new growth platform for sustainable bonding solutions.

Water-based specialty tapes are gaining market share globally as a more sustainable alternative to solvent-based solutions. They deliver up to 90% lower volatile organic compound emissions and an up to 60% lower carbon footprint versus solvent-based solutions. A good example are zero-emission flooring tapes. They combine high performance with regulatory compliance and sustainability benefits. These solutions recorded an impressive growth of above 20% in the U.S. in the first half of 2026.

Another example from the automotive industry are customized tape solutions for advanced driver assistance systems, including steering wheels with hands-off detection capabilities. This part of the business recorded growth of more than 10% globally. Also here, overall, with the acquisition of ATP, we not only drive further profitable growth, but also create additional value for our customers.

Besides M&A, innovations and investments in high-growth markets serve as catalysts for organic growth. Innovations drive an increase in the number of Henkel solutions per application, for example, in consumer devices as shown here on that slide. In Consumer Electronics, innovation trends such as miniaturization, water resistance and thermal management are driving demand for adhesives. As a result, the average number of Henkel solutions in the smartphone is expected to increase by 50% to more than 80 per device within 10 years until 2030.

At the same time, we continue to invest in attractive high-growth markets such as aerospace, data centers and protection and repair in infrastructure to further strengthen our platform for sustainable and profitable growth. To support growth in these attractive end markets, we also continue to invest in our manufacturing work, thus further strengthening innovation capabilities and customer proximity in key growth regions. A good example is our new smart factory in Yantai, China. With an investment of around EUR 120 million, the site provides a strong backbone for future growth in the region and supports high-growth industries such as electronics, automotive, medical and aerospace. And at the same time, the facility sets new benchmarks in sustainability operating with net zero emissions from day 1.

The smart factory leverages state-of-the-art automation, digitized process control and intelligent warehousing to enhance productivity, inventory management and order fulfillment speed. Complementing this investment, we have further expanded our customer and innovation capabilities with new application centers in Asia.

Most recently, we opened our new electronics co-innovation and application center in India, further strengthening our ability to support customers in one of the world's fast-growing electronics market. Together, these investments enhance our innovation capabilities, shorten innovation cycles and position us well to benefit from long-term growth trends in key end markets.

Moving to specific innovation examples in construction, where our technologies help customers address highly demanding technical and sustainability requirements. For one of the world's most iconic and technically demanding construction projects, the Sagrada Familia in Barcelona, we customized Loctite bonding solutions for the installation of large stone panels on the basilica's central tower.

Our solution enables the reliable bonding of stone and steel components under highly demanding conditions. Compared with traditional methods, our solution enabled the accelerated installation by a factor of 10 while providing exceptional strength. The project highlights our ability to combine deep engineering expertise with close customer collaboration to customize solutions for highly specialized applications. Another example is our cool roof technology. The waterproofing and coating solution help reduce rooftop temperatures, improving energy efficiency by lowering cooling temp requirements and supporting lower carbon emissions. This solution contributes to more sustainable buildings.

Turning now to Consumer Brands, where we see continued strong growth dynamics of our top 10 brands with above-average growth of more than 4%, driven by a balanced contribution from both, price and volume. They account for around 60% of the business unit sales and provide a good representation of our portfolio with leading positions in both, Laundry & Home and Hair.

Hair overall continues to be a highly attractive category, driven by trends such as the skinification of hair, hair protection and hair repair. With tech-driven innovations we develop at Henkel, we can successfully address and shape these trends. A good example is the launch of our premium scalp care line under the Gliss brand, addressing the growing skinification of hair trends. This trend applies skin care ingredients, routines and principles to hair and scalp care, reflecting the belief that healthy hair starts with a healthy scalp. And as a result, while the hair market has been growing at a fast pace of around 4.5% over the past years, we have even been able to outperform the market, delivering organic net sales growth of above 6%.

Turning to Laundry Care, where we continue to actively shape our portfolio with an increased focus on the premium segment. As highlighted during our Q1 call, we see attractive growth and value creation opportunities in the premium laundry care market. This strategic focus is also reflected in our portfolio mix. The share of premium products has increased from around 45% before the Consumer Brands merger to around 55% today. With that, bringing it well above the market average.

Looking ahead, we do also see further opportunities to expand our premium share in Laundry Care, supported by technology-driven innovations among our top brands, delivering with that superior consumer benefits. A good example here is Persil, our long-established premium brand. Here, we continue to strengthen our offering through superior performance propositions and premium formats such as caps, addressing consumers' increasing demand for superior cleaning results.

And turning to Perwoll, where we are enhancing our premium positioning by focusing on specialized textiles and garment care solutions, fabric longevity and care benefits. Here, our product innovations support consumers' growing interest in preserving and extending the life of their clothes. Most recently, we launched a new Perwoll version specifically designed for light-colored garments, thereby further broadening the brand's formulation portfolio. The success of our strategy is also reflected in the numbers.

Our top brands, Persil and Perwoll, recorded a strong performance and together delivered around 5% organic sales growth in the first half. Taking a closer look at the attractive fabric care category, which continues to stand out, here, we gained another 50 basis points market share in the first half of '26, a very strong development. And overall, we are confident that our focus on premium laundry care is translating into strong brand performance, market share gains and further profitable growth.

And now, turning to our full-year outlook. We upgraded our top line expectations for the Group and Adhesive Technologies on the back of the strong H1 performance. For the Group, we now expect organic net sales growth of 1.5% to 3.5%. And for Adhesive Technologies, we are now looking for 2% to 4%. The outlook for the adjusted EBIT margin remains unchanged and is expected to come in between 14.5% and 16%. The same holds true for the adjusted EPS growth at constant currencies, where we continue to expect an increase in the low to high single-digit percentage range. And Marco will elaborate now in more detail on our updated outlook in his part of the presentation.

And with this, let me hand over to Marco, who will lead you now through the key financials of the Half Year 1. Marco, please?

Yes. Thanks, Carsten, and good morning to everybody in the call also from my side. And building on what Carsten already shared, let me provide some more color on the Group sales performance in the first 6 months of 2026. We delivered strong organic sales growth of 3.2%. Pricing contributed with 1.1%, while volumes showed a positive development of 2.1%.

Overall, acquisitions and divestments had a slightly positive effect of 0.2%. While the divestment of our Retailer Brands business in North America in April last year had a negative impact. The acquisitions closed in the first half of 2026 in both business units, most notably ATP Adhesive Systems and Not Your Mother's in our Consumer business, had a positive impact on sales.

The foreign exchange impact was almost minus 4%, but moderated sequentially in Q2 versus Q1. The development reflects, in particular, the weakened U.S. dollar and related currencies. In nominal terms, sales amounted to EUR 10.3 billion, hence, 0.5% below prior year.

Now turning to the drivers in the respective regions in more detail. Starting with Europe. Sales were below the prior year level, but showed a clear acceleration in the second quarter, returning to positive growth. In Adhesive Technologies, a very strong growth in Industrials was more than offset by adverse developments in automotive, packaging and consumer goods and craftsman, construction and professional. In Consumer Brands, particularly Laundry & Home Care continued to face a challenging environment, while Hair remained stable.

North America recorded good organic sales growth of 2.4%. This was driven by strong organic sales growth in Adhesive Technologies, supported by all business areas, with growth in Industrials standing out. Consumer Brands achieved positive organic sales growth, driven by strong growth in Hair, while Laundry & Home Care was slightly negative. Going forward, the recent acquisitions will further strengthen our footprint and enhance scale in this important market.

Moving on to Asia Pacific. Organic sales growth came in at 10.3%, supported by both business units. Double-digit growth in Adhesive Technologies was again driven first and foremost by Electronics and Industrials. Packaging and Consumer Goods also contributed significantly. Consumer Brands achieved very strong growth, led by significant growth in Hair, while Laundry & Home Care was slightly negative.

EMEA also showed double-digit growth of 14.9%, which was supported by both business units despite continued geopolitical volatility.

Finally, sales in Latin America were below the prior year level. Similar to Europe, growth accelerated in the second quarter and returned to positive territory in both business units. While the development in Adhesive Technologies was impacted by negative effects from tariffs on value chains and demand, Consumer Brands showed positive growth in the first half of the year.

Now back to the global level and turning to Adhesive Technologies. In the first half, we achieved sales of EUR 5.5 billion with organic sales growth of 4.5%. The adjusted EBIT margin increased to a level of 17.7% in the first half of 2026. Overall, Adhesive Technologies delivered a very strong top line development in the first half, driven by sequential acceleration of both price and volume.

Pricing was positive with 1.8%, also reflecting the swift execution of pricing initiatives as a reaction to the significant raw material price headwinds. This was possible due to the strength of our market position and portfolio. The strong volume development of 2.8% in H1 was particularly driven by a clear volume expansion in our Electronics and Industrial businesses. Furthermore, the development was also supported by a positive working day impact, which accounted for around 150 basis points in Q2 and forward buying mainly in Packaging and Consumables. The adjusted EBIT margin continued to be strong year-over-year, driven by operating leverage and a positive mix.

Mobility & Electronics achieved 7.8% organic sales growth in the first half despite already high comparables. The strong increase was driven by double-digit growth in Electronics and significant growth in Industrials. In H1, automotive came in below prior year, but showed a clear sequential improvement and even returned to positive territory in Q2. This is also reflected in the most recent LVP development.

Packaging & Consumer Goods recorded very strong growth of 4.7% in the first half. Consumer Goods achieved very strong growth, and Packaging showed strong growth, particularly driven by sequential acceleration in the second quarter, also supported by resilient demand across key end markets and continued forward buying.

Finally, Craftsmen, Construction & Professional delivered positive organic sales growth of 1%. While manufacturing and maintenance showed strong growth, Consumer & Construction was slightly below prior year, also impacted by seasonal weather effects, which weighed on construction activity in Eastern Europe in the first quarter.

Turning to Consumer Brands. The business generated sales of EUR 4.7 billion in the first half with good organic sales growth of 1.7%. The adjusted EBIT margin came in at 15.3% and thus was on prior year level. In the first half, Consumer Brands delivered good organic sales growth with both a positive price and volume development of 0.3% and 1.4%, respectively.

With this, we achieved positive volumes for 4 consecutive quarters. Hair continued the very strong growth trajectory with organic sales growth of more than 4%. Laundry Care is back to positive growth with a clear acceleration in the second quarter. The adjusted EBIT margin sustained on strong previous year level despite the overall competitive environment, and of course, while keeping up with our elevated investment levels in our brands.

Now turning to the performance by business area in Consumer Brands. Laundry & Home Care recorded positive organic sales growth of 0.7%. In Home Care, we saw good organic sales growth, which was primarily driven by double-digit growth in hand dishwash. Encouraging to see that Laundry Care is back to positive growth with a clear acceleration in Q2, mainly driven by high single-digit growth in Fabric Care, supported by strong performance of our top brand, Perwoll.

Hair achieved 4.2% organic sales growth driven by an almost balanced contribution from both, the Consumer and the Professional business, with Styling being the strongest contributor. And finally, organic sales growth in our other consumer businesses was below prior year, mainly due to Body Care in Europe, while North America reported good growth.

Coming back to the group level again, I would like to share some details on the adjusted income statements. We increased our adjusted gross profit by 40 basis points, now reaching 51.7%, mainly driven by an increase in Adhesive Technologies. Marketing, selling and distribution expenses as well as R&D and admin expenses in relation to sales remained more or less on prior year levels. Other operating income and expenses had a rather neutral impact as a percentage of sales. And as a result, the adjusted EBIT margin slightly increased, reaching now 15.7%.

Moving on to the bridge from reported to adjusted EBIT. At EUR 1.4 billion, reported EBIT was below the previous year level. Onetime expenses of EUR 68 million were mainly related to transaction costs associated with recent acquisitions. Restructuring charges amounted to EUR 128 million, with the majority related to the continuous transformation of our production and logistics footprint as well as the go-to-market models. As a result, adjusted EBIT came in at EUR 1.6 billion and was thus slightly above prior year level despite negative FX effects.

And now taking a closer look at the bridge leading to adjusted EPS. The adjusted financial result amounted to minus EUR 54 million, reflecting a high leverage due to the recent acquisitions and the completion of our share buyback program. The adjusted tax rate stood at 25.5% and thus in line with the prior year. Finally, adjusted net income after minorities came in at EUR 1.2 billion. And this translates into adjusted earnings per preferred share of EUR 2.86, representing an increase at constant currencies of 7%.

On to our cash KPIs, here, net working capital in percent of sales increased by 100 basis points to 7%, also due to the recent acquisitions across both business units. Free cash flow came in at around EUR 600 million, representing an increase of around EUR 130 million versus prior year, mainly driven by higher operating cash flow. Our net financial position came in at minus EUR 1.9 billion, again, mainly reflecting cash outflows for the recently closed acquisitions as well as for our share buyback program.

As Carsten already mentioned earlier, we made significant progress in executing our M&A growth strategy during the first half of 2026, which is an integral pillar of our overall growth agenda. We expect the recently acquired businesses to make an initial positive contribution to both sales and earnings already in the current fiscal year. In 2026, the acquired companies are expected to contribute EUR 700 million in sales. In total, we acquired sales of EUR 1.6 billion on a pro forma basis 2025, supported by future mid- to high single organic sales growth, which is clearly above average. The combined sales of the 5 acquisitions are expected to increase to EUR 2 billion by 2030.

From an earnings perspective, we expect the acquisitions to already contribute in 2026 by roughly 1%, already considering financing and integration costs as well as purchase price allocation effects. Going forward, we expect a further ramp-up to at least 10% when it comes to adjusted earnings per preferred share by 2030.

I would like to conclude this chapter with our updated outlook for fiscal 2026. As Carsten already pointed out, we upgraded our top line expectations for both the Group and Adhesive Technologies on the back of a strong H1 performance. For the group, we now expect organic sales growth to come in between 1.5% and 3.5%. For Adhesive Technologies, we now expect a higher organic sales growth of 2% to 4%. This guidance range is also a reflection of a more normalized growth profile in the second half as well as the absence of a working day benefit and no further significant forward buying. Organic sales growth expectations for Consumer Brands remain unchanged, reflecting the continued market volatility and tougher prior year comparables.

Also, the full year outlook for the adjusted EBIT margin and adjusted EPS growth at constant currencies remain unchanged. And turning to adjusted EBIT margins. In line with previous communication, we expect softer margins in the second half versus first half for the group and both business units, particularly due to more pronounced raw material price headwinds in the second half of the year. However, this shouldn't come as a surprise. And taking a look at current consensus levels, it seems analyst estimates are already reflecting this development.

And with that, back to you, Carsten.

Thank you, Marco. So let me wrap up today's presentation. First of all, we delivered strong organic net sales growth of more than 3% on group level, driven by both positive price and volume development, important in both business units. With a clear sequential acceleration in Q2 versus Q1, we also delivered a strong adjusted EBIT margin development, also here supported by both business units. Second, we are successfully delivering on our M&A growth strategy in both business units by adding highly attractive assets. Overall, we expect first positive contributions from the acquisitions on both top and bottom line in fiscal 2026. And finally, turning to our updated full-year guidance 2026, we upgraded our top line expectations for the Group and Adhesive Technologies on the back of the strong H1 performance.

And overall, our strong business performance demonstrates that we have a clear strategy with our purposeful growth agenda, the right priorities and that we are able to accelerate the execution of our M&A growth strategy, thereby clearly strengthening our long-term competitiveness and the position for future success.

With that, we would like to thank you for your attention, and we are now moving to take your questions.

[Operator Instructions] The first question comes from Guillaume Delmas from UBS.

So my one question will then be on direct materials guidance because you left it unchanged. You're still expecting high single-digit percentage increase despite the fact that oil price has come down quite significantly since you published your Q1 trading update in May. So question is, why no change to the guidance? Could lower oil prices prompt some downward price adjustments in adhesives, so maybe you rolling back some prices in the back half? And if we were to assume that oil stays at current levels until the end of the year, I mean, would you be more likely to hit the top end of your margin guidance?

Guillaume, I think that is a question Marco will take. Marco?

Yes. Good morning, Guillaume, also from my side. I mean, yes, short-term oil price has come down. But before I go into further details, it's very clear, it's still highly volatile. When I remember when basically going mid of July into my vacation, oil price came down. And just a week later, the whole situation in the Middle East already escalated again, oil going up significantly. So volatility is out, and that is what we have to be aware.

And also, what is important, we did already assume some sort of reduction of oil prices in the second half. So we did not assume that level that we had when we had our Q1 call to sustain until end of the year. So that was always baked into our guidance range. So far, we see that more confirmed, but we need to see what comes. And then second, also, we noted before, there is a time lag between oil prices moving and our input material costs really moving. So that has to eat through the value chain. So that will take some time even if that oil price remains on a lower level that, that really arrives at our P&L side. And that's what we all baked into the guidance, and that's why we didn't see any reason why now to change it. At the moment, we see that still being valid.

And Guillaume, I think not directly asked, but the end of your question was related to our margin guidance. And I think we have set out at the beginning of the year with 14.5% to 16%, quite, yes, I would say, ambitious guidance in the context in which we are operating. And on top, the consensus, which is out already, is reflecting also all of that. And, therefore, I think at this point, no need to change the guidance. I hope that helps.

The next question comes from Olivier Nicolai from Goldman Sachs.

First of all, you mentioned the prebuying in H1 in the presentation. I was just wondering if you could quantify the impact seen in Q2, and which part of Adhesives benefited the most from it? And then, if I may, just on Laundry, it has accelerated in Q2. The sellout data, however, is still pointing out to share losses in the U.S. and Europe. So what actions are you taking to improve the relative performance in these markets? And how do you see the current promotional environment?

Olivier, so to your first question in terms of the effects, I think Marco was already pointing that out partly. And we have 2 effects, which we have been calling out, that is one, the working day impact, and it is also a kind of forward buying based on the situation, which especially happened in quarter 1 and also the geopolitical topics. And if you try to bring that in a quantification, it is that the working day impact on half year 1 is roughly 70, 75 basis points for Adhesive Technologies, and the forward buying effect is for the half year, around 100 basis points. So that is how the things are impacting.

And if you would -- because I think your point was on Q2, if you take that on Q2, you know that we had an organic net sales growth of 7.4%. That would be roughly 5% if you would take these effects out, means the working day impact is roughly 150 basis points for the Q2 and is around 120 basis points for Q2 when it comes to that part.

And nevertheless, if you think about 5%, that is a very strong performance despite these effects. And I think that is an absolute fantastic result in quarter 2 despite these effects. That's maybe on the first part, and I hope that answers your question on that.

The second question was on the Laundry part. Absolutely right, the situation is that we are faced within the Laundry segment over the last couple of quarters with a more intense competitive, but also pressure in terms of organic net sales growth. While Q1 was still negative, we have seen Q2 with positive growth development in terms of the organic net sales growth in Laundry.

And it is also reflected that we have consistent marketing investments behind our activities. You also have heard me talking about our strategy that we are focusing on premium -- or premiumization of our brands that was for Persil always existing. But over the last couple of years, we have been talking about that. Since the merger, we have been putting also Perwoll more and more on that premiumization part with also backed technology and reworked formulation and recipes. And I think that is paying off.

And you also see, if you look at our top 10 brands, for sure, Persil and Perwoll are part of that. I've been mentioning before that the top brand have been with 60% share, but also with growth between 4% and 5% over the last couple of years and also in the first half. So I think that's clearly pointing out that we are doing quite well on that.

You also see that our gross margins are still on a very high level, which brings me to your promotional question. So the promotional environment is, I would say, not significantly changed, so with more or less unchanged. Promotional activity has been high now for quite some time. And we stick to our strategy to be prudent when it comes to promotions and not overdo it. And I think that is something which is related. If you now see the longer term, we have been improving the gross margins of HCB by more than 1,200 basis points over the last 3 years. And one part of that is also for sure, related to the promotional topics. And we don't want a high share of ranked values -- volumes on that.

And again, for the whole year, maybe and that's the last statement on that, we see a positive territory of pricing and volume for the full year, which you also see reflected in the half year results for sure, more prominent with the volumes, but I think that's exactly our strategy after we have finalized our portfolio work that volume should come back. We always said that, and I think we promised on that in that context.

Hope that helps, Olivier.

The next question comes from Christian Faitz from Kepler Cheuvreux.

Here's my one question. So, I guess, it's for Marco. You have quite a few acquisitions on the table this year. How smoothly would you believe they can be integrated from a systems perspective? Have all of them or most of them already -- or are they running on SAP S/4HANA, for example?

Despite the fact that you said that Marco should answer that question, and I let Marco answer this question, but one thing is also important, Christian, and that is more now branding strategy and business strategy, not with all the acquisitions. We immediately believe they should be completely integrated. As an example, Not Your Mother's is a brand, is a business, which has been growing significantly in the last couple of years. And we also would like sometimes to learn from acquisitions. And in that context, for example, we will let Not Your Mother's at least at the beginning run quite independently. So, therefore, it is not always one acquisition or all acquisitions fit one day.

But your question was more related to the system part. And here, therefore, I hand over to Marco.

Good. Yes, good morning also, Christian, from my side. Yes, it really depends by deal, and I think that Carsten introduced that already. We do expect from a pure system integration, the Consumer Brands acquisitions, Not Your Mother's, Ola -- Olaplex will be rather fast. It's also less complex. While what Carsten said is that it doesn't mean that we also fully integrate that into the business structure from day 1, I think that is here where what Carsten alluded to. We really designed the integration according to the needs, and we are, for sure, considering that we need to maintain the dynamics also of the businesses that we bought. So a very tailored integration approach.

And on Adhesive Technologies, both acquisitions run on SAP. But as you know, Stahl has not even been closed yet. So we're going to look at that once also closed and then define the detailed timing. Here, we will take probably our time, 1, 2 years, to get that fully done because they operate on a quite consistent system already, and we will do that stepwise, as I said. But again, that will be determined once we also have full access to Stahl.

And obviously, congrats on the solid results.

The next question comes from Nicolas Ceron from Bank of America.

Just a question on pricing in Adhesives. Could you tell us how much further pricing you think you need to take in H2 to cover the increasing input costs? And given you've priced early in Adhesives, why do you think the margin should be down in H2 in that business? Because I thought that the whole point of pricing early was to protect the margin in H2.

So, Nick, well, if you say good morning, then we say bonjour. I hope you're doing fine. So regarding your pricing question in Adhesives, so first of all, yes, we have been taken, and I think that was one of the learnings out of the last, call it, environmental or geopolitical challenges. We took pricing quite early, which also was a little bit impacting the so-called forward buying impact in Adhesives. And I think we have shown in both in quarter 1 and quarter 2 quite good pricing components.

I think in quarter 1 -- not I think, it was in quarter 1, 0.4%, and it was more than 3% in the quarter 2, so brings the half year of around 1.8%. And we expect also pricing to remain strong in H2, supported by the swift execution of the pricing initiatives in response to the raw material cost inflation.

On the other side, for sure, the cost will come in, as Marco alluded that before, more in the second half. And the pricing will annualize in the remainder of the year and anyway remain strong as said before. I think that's how I would see that overall in terms of the pricing situation in Adhesives and how we do that.

Marco, anything to add?

Yes. Maybe on the material cost, I mean, we said there is a time lag, and that also results in H2 being much more exposed to the raw material cost headwind than the first half. I think that's what we also said before. So H2 from a raw material cost perspective will be hit much harder. And then second, there's also a mathematical effect if you fully pass it on at the end, the increase in raw material costs in absolute terms, then percentage-wise, you also see that your margin will decrease slightly just as a result of mathematics, and that is all what we baked into the guidance for the year.

Thank you, Marco. Hope that helps, Nicolas.

The next question comes from Elliott, Callum from Bernstein.

It's Callum Elliott, as you guys probably know. So my question is on Mobility and Electronics, please. Collectively, I think you guys said last year, 36% of Adhesives revenues from Mobility, Electronics. But I guess, very, very different trends between the mobility part and the electronics part. So I'm hoping that I can get you to speak a bit about the relative size of the 2 parts. I think a few years ago, the last time you quantified this, it was about 1/3 electronics and 2/3 mobility. But I imagine that's changed quite a bit over the past few years. And so hoping to get a bit of an update on what that split looks like today. And then, maybe just some more color on specifically the growth of the electronics part. I think you said double digit, but maybe just some color on where in the range of 10 to 99 that sits, please.

Callum, so yes, to give you a little bit on that, as we said, Mobility and Electronics has been the most -- yes, growing part within the 3 divisions of Adhesive Technologies. If you go on the split, auto in the meantime is slightly less than 20% of the overall portfolio of Adhesive Technologies, while Electronics and Industrials each have a high single-digit percentage within our portfolio. And yes, for sure, Electronics over the last couple of years has been based on the overall double-digit growth, which is a pattern which we have seen over a couple of years, in that context, also slightly increased their overall share, while automotive went a little bit down. And the point is, and I think that is important, already despite quite high comps, which are in the Electronics, as I said before, the double digit, and even it's more than 10% in that context, it is something which has always been, for sure, increasing the comps year-by-year.

And if you look at Electronics, again, in Q2, we have seen a clear double-digit growth rate despite the tough or the prior year comparables. Growth was driven by strong underlying demand across the core electronics application, supported by solid customer activities in the key end markets. And we did not observe any relevant or broad-based prebuying in electronics. I think that's also important to mention. And that, I think, is the overall situation. And I referred during my presentation also about the content part in electronics, the number of solutions, which we are in devices, mobile devices, tablets is significantly increasing. It will go up to 80 components, and that's doubling over a longer-term period.

And I think that's -- I think, on that part, I think, I mentioned it already, but I think in that part, I think it's also important to repeat it again. The automotive part stabilized in Q2, and we see that stabilization part not only in Q2, we are also expecting that for the second half of the year, returning to positive territory. And I also mentioned here the differentiation between combustion engines and the electronic-based vehicles, where we have 2x a higher potential -- at least 2x a higher potential than in the combustion engine with roughly EUR 250 of net sales per car in that context. And I hope that gives you a little bit more insights in the topic of automotive electronics and in that situation overall.

The next question comes from David Hayes from Jefferies.

I'm going to do a cheeky follow-up, and then, a question, if I can. So the cheeky follow-up of Callum's question just now. One of your competitors in Adhesives called out electronics seemingly slowing quite sharply in China. They also called out second half semiconductor shortage risks, which you don't seem to be alluding to at all. So I just wonder whether you'd confirm that that's something that is unique to them rather than anything that you're anticipating or factoring.

And then my question, still on Adhesives, is on tapes. You called out again that tapes has got this better growth profile. The chatter in the adhesives world seems to be that the tapes is the future. So obviously, you're now in that area with ATP, but is this an area you need to acquire more deeply into? Or is this an area you can evolve into organically so that you're kind of keeping up with that trend as we move into the midterm?

David, so for the first question, I can be very short. We don't see that, what you have described, in our business. For sure, I've also seen some cross reads, but I can't confirm that for Henkel or for Henkel Adhesive Technologies in that perspective.

On your second part regarding to tapes, I think, first of all, we see definitely that -- I'll start differently. I think we've talked about that before that we have seen specialty coatings and also tapes as -- well, we pointed that out before, we internally see that as new strategic platforms for our portfolio to broaden our portfolio based on the attractivity of the market -- of these markets also from a growth perspective. That was the reason why we went behind these 2 categories, and with ATP already closed, and Marco talked about that, that Stahl should be closed within the second half of the year, we will step into these new platforms.

And therefore, ATP really is a growth platform organically, but also potentially for further M&A going forward. It's a highly attractive and fast-growing part of the global tapes market, especially which is beyond the liquid systems. I think that is, I think, strategy-wise, absolutely the right thing what we want to do. The market offers in that segment highly single-digit growth rates in that part, which ATP is predominantly playing. So in that context, ATP is a high-performance water-based specialty tapes provider with a broad and wide variety of end markets. And that's, I think, absolutely in line with our strategy.

And for sure, we will continue a clear strategic fit. We would like to take what we have bought as an organic basis to participate. You have also heard me saying that in all the acquisitions, which we have done, the 5, or will do, we see high single-digit -- mid- to high single-digit growth rates, which will contribute to the point that in 2030, we see at least EUR 2 billion of sales with these 5 acquisitions.

David, I hope that helps.

The next question comes from Warren Ackerman from Barclays.

Warren here at Barclays. I'm going to try and squeeze 2 in. The first one, just on hair care, still very good in the first half. But in Q2, I think it did slow versus Q1, 3.3%, I think, versus 5% in Q1. Can you maybe just outline what's happening in the hair care market? It's obviously still very dynamic. But are you seeing any signs of your share gains slowing? Maybe you can outline how Schwarzkopf is doing versus the rest of hair, retail hair, and how you're thinking about hair in the back half?

And then secondly, just back on M&A. I think you spent EUR 5 billion on M&A, but your balance sheet is still very strong. How much more firepower do you still have to do more deals? And then, Marco, can you maybe say what the sales and EPS contribution you expect from the M&A for 2027? You kindly gave us the help for 2026, but for 2027.

So Warren, Marco will take the M&A question, but I can tell you, Marco has always money, but that Marco will quantify that and allude on that. But to your first question or better my answer to your first question is quite short. It is really quarterly volatility. There is -- the hair is a growth engine, and I could now allude to that we had a little bit tougher comps in that context. But the point is we are doing very well in Professional and Consumer. We are doing that now since a couple of years in a row, and there is nothing to read out of a little bit smaller -- no, a little bit less organic growth in quarter 2 than in quarter 1. And I think it's also backed by the point, the acquisitions which we are doing, Not Your Mother's and OLAPLEX, both in the field of hair, one in more retail, one more professionals.

We see market share gains in hair throughout the whole year. We have strong inroads behind that, and there's nothing to read out, out of -- even a 3-point something is a fantastic -- is a good result in that environment in which we are in. And I also finally -- no, I said it during my part of the presentation, we are now the global #2 in the professional area with the acquisition of OLAPLEX, and I think nothing more to say on that.

And now, it's time for Marco.

Warren, so on the firepower question, so what our planning is that after the conclusion also of the Stahl acquisition, i.e., end of the year, now, we're going to see a leverage of 1.5x EBITDA roughly, and that stands well within the A category for the rating. And the A rating category is our policy as well. So we want to be within that policy. And that border for that policy is 2.5x EBITDA. So you see that we still have firepower to even engage more into acquisitions. The leverage is not too high yet, but it has to be, of course, the right transaction before we would engage. So on the...

Would that be another EUR 5 billion on my calculation? I mean, would it be like EUR 10 billion? Is it EUR 2.5 billion, EUR 1.5 billion? I mean, it would seem like you got another EUR 5 billion at least.

Warren, we will be creative when it comes to that. And therefore, there is not a single number which we will give you. If there is a once-in-a-lifetime opportunity, we will make sure that we will get that lifetime opportunity. The rest, Marco has said.

And for '27?

The '27 M&A benefit, so what we can say is, and I think we -- I said that in the call, when you look at the acquisitions, assuming all have closed, then we look at an annual sales contribution of EUR 1.6 billion. That is on a pro forma 2025. So that, of course, you can assume that the businesses will grow and that will be then also the top line contribution in 2027 from a net sales perspective.

And on the bottom line, we will come back later in the future and give you more insight. But what we said is that by 2030, we're going to see at least a 10% contribution to EPS with a gradual ramp-up over the years while we realize synergies and so on. But we will not be more outspoken today because I first want to see also the purchase price allocation effects, all that being now finalized before I comment on a single year 2027.

And you heard me saying based on Marco's number of the EUR 1.6 billion, we expect in 2030 that this number will be at least EUR 2 billion.

The next question comes from Juan Rios from Santander.

Congrats on the strong results. One question from my side. Could you provide some more details on the weaker performance in Adhesive Technologies in Latin America? What were the main factors behind the decline? And how should we think about the outlook for the region going forward?

And yes, we can give you a little bit insight on that. The point is more we had a negative development in Q1, which was mainly due to negative effects from the U.S. tariffs on value chain and demand. LatAm returned to positive organic growth in quarter 2, supported by recovery of volumes and a favorable working day impact, but the organic growth was broadly in line with the overall market environment. And I think that's the overall situation in Q2, especially Packaging and Consumer Goods was the strong driver of that performance in Q2. I hope that helps.

The last question for today comes from Mikheil Omanadze from BNP Paribas.

One question from me, please. I know you cannot comment much on current trading, but I was wondering if you could give any high-level commentary on how both businesses performed in July? And more specifically on Adhesives, are you seeing any signs of reversal of prebuying? And if not, do you expect to see some degree of reversal in H2?

So Mikheil, you're absolutely right that we don't comment on current trading, but I have a smile in my face if I look at the performance in July. I hope that helps.

That's very clear. And on reversal of prebuying?

We said that there will be -- and I think Marco was also a little bit talking about that this part is related to Adhesive Technologies.

Marco, you want to say something?

Yes. I mean, so far, we haven't seen that reversal happening. I think that's what we can say. But still, as we said before, timing, when that will happen is unclear. And we need to assume that, that will happen once there's really that situation in the Middle East and the supply chains once that is really resolved. And I don't think we can say that now.

Thank you, ladies and gentlemen. I will now hand over to Mr. Knobel for his closing remarks.

Yes. Thank you for your questions. And with that, let me close today's call reminding you to the upcoming financial reporting dates. We are looking forward to connecting with you again in November when we all publish our Q3 results. And with this, I would like to thank you for joining our call today.

Have a good day. Take care, and goodbye.

Bye-bye.

Good morning, and welcome to Henkel conference call.

[Operator Instructions].

I will now hand over to Leslie Iltgen, Head of Investor Relations. Please go ahead, madam.

Good morning, and a warm welcome to everyone joining Henkel's Q1 2026 results conference call today. I'm Leslie Iltgen, Head of Henkel's Investor Relations. Today, I'm joined by our CEO, Carsten Knobel; and our CFO, Marco Swoboda. Carsten will begin with an overview of the key developments in the first quarter. Marco will follow with a more detailed review of the company's financial performance. As always, following the presentation, we will open up the lines, and Carsten and Marco will be happy to take your questions. Before handing over to Carsten, please let me remind you that this call will be recorded and a replay will be made available on our Investor Relations website shortly after this call.

By asking a question during the Q&A session, you agree to both the live broadcasting as well as the recording of your question, including salutation to be published on our website. Also, please be reminded that this presentation contains the usual formal disclaimer in regards to forward-looking statements within the meaning of relevant risk legislation. The disclaimer can also be accessed via our website at henkel.com. As always, the presentation and discussion are conducted subject to this disclaimer.

With this, it's my pleasure to hand over to our CEO, Carsten Knobel. Carsten.

Thank you so much, Leslie. A warm welcome also from my side to everyone today joining our conference call. As always, we do appreciate your interest in our company, and we look forward to answering your questions. After walking you through the key developments in the first quarter, we will elaborate on Henkel's business performance and the full year outlook in more detail. Let me move straight into the highlights of the first quarter. In Q1, we delivered good organic sales growth of 1.7% on group level, equally supported by both business units. We saw continued positive price and volume development in both business units. As a result, volumes have now been in positive territory for 3 consecutive quarters.

Furthermore, we are making strong progress in executing on our M&A strategy in both business units, and we have recently signed 5 acquisitions with combined annual sales of around EUR 1.6 billion. To date, we have already successfully closed 3 of these 5 transactions, whether it be Laroc, ATP Systems, and Adhesive Technologies, and Not Your Mother's in Consumer Brands. I will elaborate in more detail on the acquisitions in a minute. In addition, we have successfully completed our EUR 1 billion share buyback program by the end of March, in line with the announced timeline. Finally, our full year 2026 guidance remains unchanged. As you are all aware, acquisitions are an integral part of our growth strategy. With the recently announced acquisitions, we are investing a total of nearly EUR 5 billion and adding combined annual sales of around EUR 1.6 billion.

Overall, expected sales growth of the assets we're acquiring is clearly above average. By 2030, we expect to realize synergies in the high single-digit range as a percentage of sales of the acquired companies, translating into an increase in adjusted EPS of at least 10%. We will provide further information once all transactions have been successfully closed. While we keep investing into our businesses organically and non-organically, we also let our shareholders participate in the company's success. Through the completed share buyback program of EUR 1 billion and dividends of more than EUR 800 million paid for 2025, we have returned almost EUR 2 billion to our shareholders over the last 12 months. In Adhesive Technologies, we successfully closed the transaction of ATP Adhesive Systems effective April 1.

With this acquisition, we are entering the highly attractive and fast-growing market for high-performance water-based specialty tapes, which currently grows at around 7% and are expanding our portfolio beyond liquid adhesives with solid solutions. Water-based specialty tapes show increasing market penetration and outperform the broader tapes industries with above average growth rates by offering a more sustainable alternative to traditional solvent-based tapes. By increasing our offering and capabilities in the tapes market with a broader range of innovative bonding solutions, we create additional value for our customers, and we drive further profitable growth. With the acquisition of Stahl, we are expanding into the specialty coatings market for flexible materials, and we are adding a highly complementary portfolio that serves various customer segments to our business. This market shows attractive growth rates of 3% to 4%. Stahl also focuses on environmentally responsible water-based solutions, further underpinning our sustainability commitments.

Building on valuable complementary technology and R&D capabilities and a knowhow-based business model with a high degree of customization, this acquisition is a strong strategic fit for our Adhesive Technologies business and will enable us to bring more innovations to our customers. Together with the previous acquisitions of Critica Infrastructure and Seal for Life. We are further strengthening and expanding our technology portfolio, which is already the broadest in the industry, by adding attractive adjacencies. As a result, we are not only entering new markets, but we are also creating the basis for new technology-led opportunities in our core businesses, unlocking additional growth potential. By further reinforcing our technological agnostic approach, we can drive even more customer-centric innovation tailored to specific application and performance needs across industries.

A strong example of how our broad solution portfolio positions us as the partner of choice for our customer is NASA's recent Artemis II mission, where we delivered industry-leading performance and reliability across structural integrity, thermal protection, surface technologies, and safety-critical sealing. Overall, we are supporting space exploration with more than 20 mission-critical solutions engineered to withstand extreme environments and to enable highly demanding, one-of-a-kind applications. The proven performance of our Loctite solutions on the Orion spacecraft underscores the relevance of our materials for both today's and future space missions. Another great example of our technology leadership is in paper packaging, where we are expanding our coatings expertise to capture high-growth opportunities in the packaging market. With advanced barrier and heat seal coatings, we are enabling our customers to shift from traditional plastics to recyclable paper-based packaging solutions.

Furthermore, we are broadening our solution portfolio with our in-house packaging recycle lab, which offers comprehensive recyclability assessments for fiber-based packaging. Turning now to our Consumer Brands, where we are further expanding our hair business through attractive M&A opportunities with Not Your Mother's and with Olaplex. After having streamlined and cleaned up our portfolio over the past 3 years, we are now adding back size and scale with a brand that has historically grown clearly above market rates, further strengthening our footprint in North America. In the meantime, we successfully closed the acquisition of Not Your Mother's effective April 24. Not Your Mother's is a leading and a fast-growing hair care and styling consumer brand in the U.S. and it allows us to expand our hair footprint in the largest global retail hair market, which shows attractive growth rates of around 4%.

Not Your Mother's brings a diversified channel footprint, including mass retail and e-commerce, creating attractive opportunities to accelerated growth in our consumer business. Finally, its complementary capabilities and deep hair expertise further strengthen our innovation engine and power insight-driven product development. With the acquisition of Olaplex, we are expanding our global presence in the premium hair care segment, which also offers attractive growth opportunities with a CAGR of around 5%. Olaplex is a well-established, globally active premium channel hair care brand offering a portfolio of science-led high-performance products. It addresses a diversified premium channel mix across professional, specialty retail, and also e-commerce. With its strong scientific foundation, we see compelling opportunities for future growth and innovation. Over the last few years, we have been significantly transforming our Consumer Brands portfolio through strategic refocus and more recently with targeted M&A. There is a clear focus on attractive categories.

We have sharpened our brand focus and we are successfully executing on our M&A growth strategy. When looking at how our hair portfolio has evolved and considering all transactions will be closed, we will have expanded this business by around EUR 1 billion since 2021. In addition, our hair business has been growing above average over the last years. As a result, we now have a much more balanced portfolio. Our hair business, in the meantime, has nearly now the same size as our Laundry & Home Care business, each accounting for around 40% of Consumer Brands sales. At the same time, we have enhanced the attractiveness of our Laundry & Home Care business through a clear focus on premium brands in combination with impactful innovations, for example, under our strong brands Persil and Perwoll.

With our strong brands, customer-centric innovations, and an almost balanced footprint in consumer and professional, we are building on a strong foundation to become the authority in hair. This ambition is underpinned by our strong growth performance with a CAGR of more than 6% over the last 3 years, outperforming our Consumer Brands business by more than 300 basis points. Finally, the continued strong growth dynamics of our top 10 brands are underscoring our sharpened brand focus. In Q1, the top 10 brands again delivered above average organic sales growth of around 5%, driven by a balanced contribution from growth, price, and volume, and we expect their share of sales, which currently accounts for around 60%, to continue to increase going forward.

In this context, let me also highlight the strong results of our premium laundry care brands, Persil and Perwoll, mentioned before, a clear proof that our focus on premium brands with strong innovations pays off. On Persil, we delivered mid-single digit growth in Q1. In 2025, Persil was the market leader in Germany, gaining 200 basis points in market shares. Perwoll achieved high single-digit growth in Q1, underpinned by strong market share dynamics with gains of 170 basis points globally in our active markets in 2025. Now turning to our full year outlook, which remains unchanged. For the group, we continue to expect organic sales growth of 1% to 3%, an adjusted EBIT margin in the range of 14.5% to 16% and adjusted EPS to increase in the low to high single digit % range.

With this, let me hand over now to Marco, who will lead you now through the key financials in more detail.

Yes, thanks, Carsten. Good morning to everyone in the call also from my side. Building on what Carsten already shared, let me provide some more color on the drivers of the group sales performance in the first 3 months of 2026. We delivered good organic sales growth of 1.7%, with both price and volume in positive territory. On group level, volume development contributed with 1% and pricing with 0.7%. Acquisitions and divestments reduced sales by roughly 2%, still reflecting the retailer brands divestment in North America, which was closed in April 2025. FX effects were a strong headwind of minus 5%, mainly due to the significantly weakened dollar and related currencies in comparison to Q1 last year.

Q1 came in below the full year guidance, we expect currency headwinds to moderate for the remainder of the year and to come in within the negative low single-digit % range. In nominal terms, sales amounted to EUR 5 billion. Turning to the drivers in the respective regions in more detail. Starting with Europe, where sales were down 3.4% year-on-year, reflecting a weaker business performance in both business units. In Adhesive Technologies, markets remained muted across all business areas, and in Consumer Brands, particular Laundry continued to face a challenging environment while Hair delivered above-average growth. In North America, organic sales growth was positive, clearly driven by Consumer Brands, whereas Adhesive Technologies remained flat. Within Adhesives, the good growth in Mobility and Electronics was offset by an adverse development in Packaging and Consumer Goods, while Craftsmen, Construction and Professional remained stable.

In Consumer Brands, the development was driven by very strong growth in Hair and significant growth in other consumer businesses, while Laundry and Home Care remained below prior year. Moving on to Asia Pacific. Organic sales growth recorded 10.3% growth, supported by both business units. Double-digit growth in Adhesive Technologies was again driven by Electronics and Industrials, with Packaging and Consumer Goods also contributing strongly. Consumer Brands achieved very strong growth led by Hair, while Laundry and Home Care posted good growth. India, Middle East, Africa also showed double-digit growth of 12.8%, which was supported by both business units. Finally, in Latin America, sales were below prior year due to Adhesive Technologies, while Consumer Brands showed good growth. Back to the global level and now turning to Adhesive Technologies in more detail.

In the first quarter, we achieved sales of EUR 2.6 billion with organic sales growth of 1.7%. Overall, Adhesive Technologies showed good growth development in the first quarter, supported by positive pricing and positive volume of 0.4% and 1.3% respectively. Organic sales growth came in slightly stronger than expected. Volume development was also supported by forward buying effects related to current geopolitical uncertainties and anticipated price increases, mainly in our Packaging & Consumer Goods business. On business level, Electronics and Industrials continued to be the main growth drivers. Overall, Mobility & Electronics achieved 6.7% organic sales growth in Q1, driven by double-digit growth in Electronics and very strong growth in Industrials.

Automotive demand was muted across different key markets, also reflected in the light vehicle production outlook for 2026, which is currently expected to decline by almost 2%. This compares to a flattish expectation at the beginning of the year. Packaging & Consumer Goods recorded positive growth of 0.5% in the first quarter. Consumer Goods achieved good growth, also supported by forward buying effects. Packaging was below prior year, reflecting the persistent muted demand situation. Finally, sales in Craftsmen, Construction & Professional came in below prior year. While Manufacturing and Maintenance showed positive growth, Consumer & Construction was negative due to the challenging market environment. Effective as of April 1, we combined our strategic business unit, Construction, and our strategic business unit, Consumers and Craftsmen.

From now on, we have 2 regionally focused units, Consumer & Construction, Eurasia and Africa, plus Consumer & Construction Americas. This enables us to accelerate growth and strengthen our market position while working more closely with local customers and partners. Turning to Consumer Brands, the business generated sales of EUR 2.3 billion with an organic sales growth of 1.8%. Consumer sentiment remains muted. We achieved good growth in sales. Both price and volume development were in positive territory, with 1.1% and 0.7% respectively. With this, I would also like to highlight that volume development was positive for 3 consecutive quarters. Hair continued to be the main growth driver, delivering organic sales growth of around 5% with very strong volume contribution.

As Carsten already mentioned, also the top 10 brands contributed with consistent above average top-line growth of around 5%, with balanced pricing and volume in Q1. Turning to the performance by business area. Laundry & Home Care showed a stable development. In Home Care, we saw positive organic sales growth, which was primarily driven by double-digit growth in hand dishwashing. Laundry care came in slightly negative, mainly due to fabric cleaning, while Persil stood out with very strong growth. Fabric care showed significant growth, supported by our top brand, Perwoll. Hair achieved 5.1% organic sales growth, which was driven by both the consumer and the professional business. In the consumer business, the strongest contribution came from coloration. Here, our mega brand Schwarzkopf showed significant growth, also supported by the recently launched innovations like, for example, Creme Supreme.

The professional business recorded very strong growth, amongst others, supported by strong growth in our key region, North America. Other consumer businesses recorded positive organic sales growth of 0.5%, driven by North America. Closing this chapter with our outlook for fiscal 2026. Our guidance ranges for organic sales growth, adjusted EBIT margin, and adjusted EPS growth at constant currencies remain unchanged. The crisis in the Middle East is a challenge for everyone. In particular, the impact it has on direct material prices and logistics, which have increased notably since beginning of the conflict. We are working intensively on comprehensive countermeasures to mitigate the increased direct material price and logistics headwinds, for example, through supplier renegotiations, pricing actions, and intensified cost management.

Taking this into consideration, as of today, the broad guidance ranges, which we choose to cater for the volatile environment, cover the current headwinds.

With that, back to you, Carsten.

Thank you, Marco. Let me wrap up today's presentation. We delivered good organic sales growth of 1.7% on group level, equally supported by both business units. We saw continued positive price and volume development in both business units. As a result, volumes have been in positive territory for 3 consecutive quarters now. We are making strong progress in executing on our M&A strategy in both business units by adding highly attractive assets. We have already successfully closed 3 out of the 5 acquisitions, which in total will add annual sales of around EUR 1.6 billion and which are expected to deliver above average sales growth. We have successfully completed our EUR 1 billion share buyback program by the end of March, in line with the announced timeline. Last but not least, our full year 2026 guidance remains unchanged.

With that, we would like to thank you for your attention. We are now happy to take your questions.

[Operator Instructions] Our first question comes from Guillaume Delmas from UBS.

One very quick housekeeping and then one question. The housekeeping is, Marco, you mentioned some forward buying effects in Adhesive Technologies in the first quarter. I was just wondering if you could maybe quantify this impact on your Q1 organic sales growth. Then my question is on your margin guidance, because you kept it unchanged despite now expecting high single digits % inflation in your commodity cost. Can you maybe talk about the mitigating factors you've got in place, and that you will implement to offset this additional cost? I guess related to that, should we therefore expect a year of organic sales growth that could be more price-led as opposed to volume-led? Thank you very much.

Morning, Guillaume. I take your second question, and I start with that, and Marco takes the first one. When your question is regarding margin guidance unchanged and the context of higher material prices, let me explain it in a way that. One thing is clear, of course, the crisis in the Middle East is a challenge for everyone and in particular, the impact on the direct material prices, where you have been referring to and also the logistic costs, which have increased notable since the beginning of the conflict and which also led to the change from the low single-digit originally now to the high single-digit.

One thing is clear, we are working on that intensively to on a on comprehensive countermeasures to mitigate the increase, the direct material prices and also the logistic headwinds. For example, with 3 areas. The one thing is supplier renegotiations, the second is pricing actions, and here, especially in Henkel Adhesive Technologies, we have taken learnings versus the COVID situation where we have been starting with this price increases earlier than at that time. That's the second part. The third one is an intensified cost management approach because we all don't know what is happening and how long these crisis are with us.

Taking this into consideration, as of today the broad guidance ranges which we have been giving at the our full year call for 2025 and giving the outlook for '26, which were more broad, which we have chosen to cater for the volatile environment and cover also the current headwinds. For sure at that time, we did not know that there would be a crisis or a war within the Middle East. On the other side, Guillaume Delmas, if you look at the guidance which is in terms of consensus, I think this is already ready in fact, recalling that and showing that how that is related to that. Maybe that's on your question for the margin guidance.

On top you have on the OSG, the topic of pricing and volume for the full year. Yes, if you look at the quarter 1, I think we have a good balance between price and volume even we had with 0.7% price and 1.0 volume, even a higher volume start into the year. On the other side, you need what I just said in terms of the price situation in Adhesive Technologies that most probably over the course of the year will have a higher impact than what you have just seen in the quarter 1. So we assume that for the full year we will see positive pricing and volume on group level.

Please understand that we are not giving more details in terms of on the BU level part. Maybe that's a little bit broader the answer, hope that covers your 2 questions. With that, I'm giving or handing over to Marco to your first question with this topic of forward buying. Marco?

Yes. Guillaume also good morning to you from my side. Yes, indeed we have seen some pre-buying or forward buying of customers in that in particular developed in the course of March and that is closely related what Carsten explained. We were relatively fast in also announcing certain price increases in parts of the business and that of course also resulted then in some pre-buying in particular the second half of March. That came relatively late in the quarter and was also a bit surprising the magnitude to us.

We do estimate that that effect has roughly 80 basis points on our organic sales growth in the first quarter and we see that, for example, in our Packaging & Consumer Goods business where I did also comment on that before and more in Asia Pacific than in some of the other regions. Roughly 80 basis points effect on HAT in the first quarter. What is also important when we look forward, of course nobody knows how that can continue. We can probably not assume that that is going to continue now in second quarter in that magnitude. What we also see is that in Q2, at least in Adhesive Technologies, we see some benefit coming from a positive working day impact in the second quarter.

Also that has to be taken into consideration when we think now how would that all develop going forward.

The next question comes from Nicolas Ceron from Bank of America Global Research.

Could you talk about your IMEA region? I think there's been a bit of a slowdown if you compare to Q4 last year. Maybe if you could talk about what country or what category drove the slowdown and if you've seen any strong impact on your Middle East business. Thank you.

Good morning, Nicolas. Or Nicolas. Thank you for the question. First of all, I think the slowdown, I would call it if you have a double-digit performance in a region of IMEA with this situation in which we are currently confronted with means the crisis, I think that is a good result. Why is it a good result? Because you for sure we have some countries within IMEA which are impacted by the war and showing also Yes, not the same performance as we had in 2025, but there are countries like India and China. India.

India and Turkey which are part of the IMEA region which are showing significant positive developments and maybe to differentiate that a little bit, the performance is supported by both business units. If we maybe start with adhesives, we delivered a very strong growth in Q1, mainly driven by the Mobility & Electronics division, as well as Packaging & Consumer Goods, both of which showed double-digit growth rates. If we look at the Consumer Brands, here we recorded also double-digit growth in Q1, particularly driven by a double-digit growth in both in Laundry & Home Care and in Hair. Therefore, in general, a quite good performance despite the situation which we are confronted with. I think that brings it quite good across. Hope that helps, Nicolas.

The next question comes from Fon Udomsilpa from RBC.

Just another one on pricing action, please. You touched on how you plan price negotiation for Adhesive Technologies, but could you also help us think about the consumer business? Are there any upcoming innovation that will be support price negotiation for the remainder of the year?

Morning, Fon. Yes, I think it is clear that the pricing, as I explained it, is for sure in not only in quarter 1, but especially also for the full year, is more driven by Henkel Adhesive Technologies. As I mentioned it before, we have been already implementing certain price measures in that part, which is seen in Q1, but also will be seen during the next quarters. If we move to the consumer part of our business, the pricing was 1.1%, and by that remained in positive territory in the Q1, despite the muted consumer sentiment globally and in particular the intense competitive environment in Laundry & Home Care.

Q1 pricing was also supported by specific pricing initiatives related to strong launches and also relaunches, and pricing measures in specific markets. Pricing in that context was positive in Laundry & Home Care and also on other consumer business, while slightly below the prior year. We constantly look at pricing opportunities, which you are referring to when you talk about innovations which are upcoming, in alignment with the market conditions and the reasonable implementation. The commercial teams are closely monitoring all scopes for further potential price increases. Also considering the recent dynamics from rising input costs. I hope that helps the answer on your question, Fon.

The next question comes from Christian Faitz from Kepler Cheuvreux.

One question, please. How concerned are you about consumers downtrading to private label brands due to inflationary trends left and right? I'm aware that you have a broad portfolio, including lower priced brands, yet there seems to be a trend of consumers seeing it as chic to shop for dedicated private label brands. Any comments would be welcome.

So good morning, Christian Faitz, and thanks for your question. I think, first of all, the point of that consumers trading down, I think that's something whenever I think I've talked about that and you know that whenever we are coming into a crisis situation or when our concerns about the sentiment, I think that has an impact on Consumer Brands businesses. As we always pointed out, more on Laundry & Home Care than in the Hair segment. Maybe a little bit more in detail, after having shown some recovery in the Jan-Feb of this year versus the muted levels at the end of 2025, consumer sentiment has most recently weakened again in some key markets.

Competitive pressure and the muted sentiment continue to be most pronounced in the laundry market, as I mentioned it just, but that is not surprising or new. For example, in the U.S., consumer sentiment has dropped again recently and has even fallen below the '25 levels. In Europe, consumer sentiment has stabilized at lower levels in Germany towards the end of '25, but has recently weakened with the war of Middle East. You know, the answer of all of that is always innovations. You know, that is the purpose of a branded consumer goods company, to convince the consumer with innovations. I made, I think, 2 reference during our call today. The one is on our top 10 brands.

Not only that they are at the 60% level in terms of total sales, but they're outperforming in terms of growth rates. Again, I think in both, in price or with a good mix of price and volume. I think that is something which we have been had also some pain over the last years because we have been adjusting our portfolio more to the areas of stronger growing categories and segments. Also, as I have been alluding to that, in the meantime, now the hair category, if you would add the 2 acquisitions or would you assume the closing of the 2 acquisitions, the hair category in our retail business would be as big as our laundry category.

I think that is showing that our strategy is absolutely working and we are executing that not only from an organic perspective, but also from an investment philosophy now with recent years before with Vidal Sassoon and Shiseido Professional and now with Not Your Mother's being already closed and Olaplex being signed and for sure, we expect that this will be closed within this year. I think that is exactly in line of what we are doing. I hope that gives you a little bit of a glance of what is happening and how we are seeing the situation. That is for sure, as I said, right strategy and executing against that.

Yes, good luck managing your overall portfolio through this unprecedented crisis.

Yes. You know, Christian Faitz, we are used to that crisis situations, I would say now it's in 6.5 years. We take it always as a challenge, and I think we have shown that we have a resilient team and also resilient businesses that are able to, I would say, compete and develop also in these really challenging times in which we are in.

The next question comes from Tilly Eno from Morgan Stanley.

The first is just on, you've mentioned laundry, it's still quite challenging in terms of the competitive environment. Could you give us any more color on the most recent developments there? Have you seen any letup in promo activity given the rising cost pressures that you're seeing? My second question just on hair. Just to clarify, I think you mentioned in one of the previous answers that pricing was down slightly year on year. Could I just check that that was correct? Could you give a little bit more color on the dynamics there if that was the case? Thanks so much.

Even if I have not 100% your second question, I understood that was on hair, correct?

Yes. I think in one of the previous answers, you mentioned that pricing was down slightly in hair care. If that was the case, just wanted to double-check, and if so, could you just give a bit more color on what was driving that?

Good. Maybe first on clarifying that. My answer was only related on IMEA pricing, which was below prior year, not on the global setup of hair. Maybe that as a clarifying part before I come back now to your 2 questions, how is laundry doing? How is hair doing? Okay?

Perfect.

Good. Maybe starting with Laundry & Home Care. Laundry & Home Care showed a slightly positive development in Q1 despite challenging market dynamics and an intense competitive environment. Laundry came in slightly below the prior year. Home Care recorded really a positive growth set up. Within Laundry, I think it's especially fabric finishes and fabric care who contributed very positively. I mentioned in the call before that the core brands such as Perwoll even showed very strong organic sales growth, and I think that is worth mentioning. Home Care recorded positive OSG in Q1 with the strongest contribution coming from dishwashing. From that part, I think that's from my point of view on the Laundry part.

If I now move to the hair business, hair continued its strong growth trajectory and even showed a further acceleration versus the Q4 of 2025, now reaching a very strong growth rate of above 5% in Q1, that was driven by both, by consumer professional. The other one, I think is important why is that? That is for sure, not only while the market is attractive and showing good growth rates, but it's also related that we are, I would say, hitting the needs and the wishes of consumers. One example is our Creme Supreme from Schwarzkopf. I've mentioned that also during our AGM last week.

I think it's a really fantastic innovation, bringing also a new trend into the coloration business in a market which is for sure also very dynamic. That's on that part. If I give you a little bit more now, glance also when I split the hair business, the styling recorded a significant growth in Q1 of this year with strong regions, and the strongest performance or support was from North America. In that context, colorants, besides what I just said, related to Creme Supreme, was also with significant growth rates, especially strong in Europe and a double-digit growth in IMEA and in APAC. The care part came in slightly below the prior year with significant growth in IMEA, offset by Europe.

Our professional, I mentioned it before, more or less the same growth rate as also in the retail, very strong, in Q1, and here all regions are really contributing very positively. You may have seen now with the 2 acquisitions, we are heading to means Not Your Mother's and also Olaplex. Both are very strong in the care segment, which is the segment where we, I would say, in comparison to styling and colorants, are not as strong in care. I think here we would like to close the gaps from a regional perspective, but also premium-wise, bringing solutions to that. Therefore, we have quite good positive thoughts when we take these 2 acquisitions into our portfolio.

Hopefully, the one already with Not Your Mother's, the other, hopefully quite soon. Hope that helps you, Tilly.

The next question comes from David Hayes from Jefferies.

My question is in focus HCB, just to understand whether there was any pre-buy dynamics in the first quarter. Some of your competitors have called out, there was some buying ahead of price increase risks. I guess how that nets off with, what was that? I think you talked about a sell in ahead, a sell out in the fourth quarter due to innovation timing. Did that all sort of net off and we there was no effect, or whether it was some sort of net dynamic? Related to that, just in terms of the second quarter, much more difficult comp, certainly at face value in the second quarter for HCB.

Do you think that's still a positive growth level in the second quarter in terms of that comp stepping up? Thank you.

Think, David, your 2 questions. I would say, Marco, you take first, the pre-buying question.

As we had commented, we see that very clearly in our Adhesive Technologies business, that customers were on pre-buy. We could not observe that so clearly in our HCB business. There are some reasons when we look at the development in the first quarter first, of course, we had quite soft comps in the year before, so that is one driver that has to be taken into consideration. Secondly, we came out even a bit stronger than we expected in HCB, because in particular, our Middle East business has proven to be more resilient than initially thought. These are basically the 2 key considerations for HCB in the first quarter. Again, pre-buying is mainly what we could see more clearly in our adhesive business.

David, on your second question, I fully understand your question, but I hope you also understand, in general, I would say we don't expect that consumer sentiment, or we do expect the consumer sentiment to remain subdued, and the overall market environment to remain quite volatile. Also in Q2 things are changing from day to day. On the other side, you know that we're not guiding and giving detailed information on quarters. You know, as I said, things are changing even from a week to week basis in that context. Our guidance range for the business units expect that different developments are happening. Yes, you're right that, for sure, the Q2 comparables are higher than the other ones.

I think that is also one of the reasons the 1.8% has been impacted also by lower comparables for Q1 of last year with the minus 3.5% we had at that point. Yes, we have tougher comps in Q2, but on the other side, I think that is the reason why we have also not changed or our guidance remains unchanged, means for our consumer business, it is between 0.5% and 2.5%. Therefore, we're for sure we're working as much as possible to further develop our business. As I mentioned it with the questions of Tilly before, in the segment, I think we have good launches and innovations at hand, but the situation is not an easy one.

Hope that helps, David.

The next question comes from Nicolai Olivier from Goldman Sachs.

It's Nicolai Olivier from Goldman Sachs. Just one question, hair care. That was very strong in Q1. Can you give us a bit more details by region in term of growth rates? You have some successful product launch in Q1. Can you give us a bit of an idea of how much of a boost it was? Is there any phasing impact we should be aware for the rest of the year? Thank you.

Good morning, Olivier. Sorry for that. I had a noise in the line. Can you repeat the second question, please?

The whole question was on hair care. Remained very strong in Q1. Can you give us a bit more color on the growth rate by region? How much of a boost in sales growth was driven by the new launches you have in Q1? Is there any phasing impact we should be aware for the rest of the year? Thank you.

Good. Thanks for the question. Maybe I didn't want to hear the second question. To answer that on the first, please understand, we don't quantify what is the impact of innovations or differentiate between what is the impact of running business and innovations in percentages. Let me first maybe, and that helps maybe a little bit, to give you more glance or input on how the hair business has been in Q1. First, I said it, very strong growth for both consumer and professional. Performance in Q1 was above 5%, to be precise, 5.1%. If you look at the different segments, which is styling, colorants, and care.

Styling recorded significant OSG with which came across the regions, but the strongest contribution was coming from North America. Hair colorants, also a significant OSG in the Q1, with strongest growth or with strong growth in Europe and a double-digit growth in IMEA and in APAC. Here, I mentioned before the innovation of Creme Supreme, which has a quite significant innovative impact, because that is a little bit to your second question, where the innovations play quite a significant role. Hair care came in slightly below the prior year.

Here we had quite good growth or significant growth in IMEA, with being offset by Europe. On the other side, what I can tell you for Creme Supreme, that it delivered double-digit growth and hair is positive across all the regions. If you now add care, styling and color together, I think that is for me a real significant positive sign that what we are doing. You know, because David asked, think about comparables. We have always now, since the last couple of years, always high comparables in hair, but we are always in the situation to outperform that.

We are really having a good run in that business based on organic developments, but also about the acquisitions we have done in the past with Also Soon, Shiseido Professional. From a technological point, again, to your innovation questions, we have taken also innovations which we have, or technology which we acquired via the Shiseido Professional into the rest of our portfolio and in that context, really looking forward to a business which is very strong, and I mentioned it in the meantime, also as big as our laundry from a global perspective. Hope that helps.

The last question comes from Mikheil Omanadze from BNP Paribas.

One follow-up and 2 quick questions from me, please. On the follow-up, on adhesives, you referred that there will be likely moderation of pre-buying benefit in Q2, but also that there will be a working day benefit and more pricing. Net-net, do you expect organic sales growth to step up in adhesives in Q2 versus Q1? Should we expect any working day impacts in Q3 versus Q2? My 2 questions, one would be on the raw mats. The guidance that you provided, could you please shed some color whether you assume a step-up in raw materials to be more material in adhesives versus Consumer Brands or vice versa? The last 1 would be on your EPS guide.

What do you currently factor in, in terms of the tailwind from your acquisitions? Thank you.

Mikheil, thank you for your 3 questions or follow-up and questions. The follow-up topic regarding pre-buying and also the second in terms of raws, Marco will take these. From an EPS perspective, I think it is quite clear, as I said, the guidance or as we said, the guidance is unchanged. You have heard us saying that in total, the acquisitions will realize synergies in a high single-digit of sales related to the acquisitions we are doing, and we have also given in terms of full swing, when we have integrated all the acquisitions until 2030, there will be an impact of at least 10% impact.

You know, the impact within this year, we would like then to quantify if we have also closed all the acquisitions and there is, Yes. We will not speculate when will that happen, but most probably we can do that in the half-year call when we are in August. With that, handing over to Marco for your follow-up question and for your follow-up and the questions. Marco?

Indeed, you had a question on HAT, so Adhesive Technologies, impacts from pre-buying, working day effect and pricing. Pre-buying, I did quantify that we do expect that with roughly 80 basis points impact in the first quarter. Then, we also commented that we see a positive working day effect in the second quarter. Here, order of magnitude is 100 to 150 basis points impact that can have positive in the second quarter, then some positive pricing. All that is, I would say, yet difficult to predict what the net-net is out of that. I would refrain now from saying whether how that compares second quarter to first quarter. That's too early to say, in particular in that volatile environment.

In regards to the working day effect, for the second half or Q3, Q4, we see that there is no major working day effect that we do expect in the second half of the year that I can say. On the raw material guidance question that you had is how I understood it, is it more impacting HAT, Adhesive Technologies or Consumer Brands? We see that in fact, more skewed towards Adhesive Technologies. Headwinds roughly more hitting adhesives with 2/3 and HCB with 1/3 of the impact.

Thank you, ladies and gentlemen. I would now like to hand over to Mr. Knobel for his closing remarks.

First of all, thank you so much for your questions. With that, let me close today's call with reminding you of the upcoming financial reporting dates. We are looking forward to connecting with you again, I mentioned before, in August, when we will publish our half-year report. With this, I would like to thank you for joining our call today. Marco and myself wish you a good day. Take care and also goodbye. See you soon.

Good morning to everyone. A warm welcome to everyone who's joining our full year 2025 results conference call today. My name is Leslie Iltgen, Head of Investor Relations at Henkel, and I'm today joined by our CEO, Carsten Knobel; and our CFO, Marco Swoboda. As always, following the presentation, we will open up the lines and Carsten and Marco will be happy to take your questions.

Before handing over, please let me remind you that this call will be recorded, and the replay will be made available on the Investor Relations website shortly after this call. By asking a question during the Q&A session, you agree to both the live broadcasting as well as the recording of your question, including solitation to be published on our website. Also, please be reminded that this presentation contains the usual formal disclaimer in regard to forward-looking statements within the meaning of relevant U.S. legislation, which can also be accessed via our website at henkel.com. The presentation and discussion are conducted subject to this disclaimer.

With this, it is my pleasure to hand over to our CEO, Carsten Knobel. Carsten, please go ahead.

Thank you so much, Leslie. Good morning, and a warm welcome also from my side to everyone joining our conference call today. As always, we do appreciate your interest in our company, and we're really looking forward to answering your questions after the presentation. After walking you through some of the key highlights of fiscal 2025, Marco will elaborate on Henkel's business performance and full year outlook in more detail. Following that, I would like to make Henkel's key drivers for profitable growth, the main priority for today's call. So let me move straight to the key highlights of the full year.

Organic sales growth in fiscal 2025 was 0.9% with positive price and volume development in Q4 in both businesses. Henkel also recorded an EBIT margin increase driven by strong gross margins while keeping up with appropriate investment levels in order to fuel further growth. In addition, EPS at constant currency grew strongly by nearly 5% versus the prior year. We successfully concluded the integration of Consumer Brands 1 year earlier, reaching EUR 540 million net savings, thus more than we had originally targeted.

We also offer attractive shareholder returns by increasing dividends and executing our share buyback of EUR 1 billion, which we have nearly concluded in the meantime, reaching more than EUR 900 million by the end of February. And furthermore, as you all know, M&A is an integral part of our growth ambition. And over the past weeks, we were quite successful and reached agreements for 4 attractive acquisitions, 3 for Adhesives and 1 for Consumer Brands, adding around EUR 1.2 billion in sales. And last but not least, our full year 2026 guidance implies further top and bottom line growth, and we, of course, also reiterate our midterm ambition.

I would now like to turn to some of the key highlights. We concluded the year with a strong financial position, which is now a strong basis to invest further into our businesses and into M&A, which is the integral part of our strategy. As part of its long-term growth strategy, Henkel is constantly aligning its business units with the requirements of dynamic markets and changing customer expectations in order to achieve long-term success with future-ready operating models. Following our announcement last year, we completed the evaluation of establishing separate legal entities for our 2 business units in the first step in Germany and will present this proposal to the upcoming AGM for resolution by shareholders.

With this move, we aim to make our processes and structures more agile and to better support the future needs of our businesses and the growth agenda of the Henkel Group. The steering of the group and our business units will remain unchanged. Furthermore, we continuously foster AI-driven solutions across the businesses. In Adhesive Technologies, Electronics stood out posting double-digit growth as well as industrials with very strong growth, and we expect this trend to continue in 2026.

As briefly already mentioned, we recently reached agreements to acquire the Stahl Group and ATP Adhesive Systems as well as a majority stake in Weatherbee La Rock. In Consumer Brands, volumes accelerated in the course of the year and were positive in H2. Hair clearly stood out being the main growth driver, but also our top 10 brands showed strong growth in 2025. We are successfully expanding our portfolio in Consumer Brands. Just last week, we signed an agreement to acquire a leading and a fast-growing hair care and styling brand in the U.S. called -- Not Your Mother's.

We also successfully delivered on our sustainability targets. We made significant progress on our net zero target by reducing greenhouse gas emissions by 29% for absolute Scope 1, 2 and 3, and we are driving carbon-neutral production at 37 sites globally. We increased the share of recycled plastic for all consumer goods packaging from 15% in 2020 now to 28% at the end of 2025. We increased the amount of palm-based ingredients coming from certified sustainable supply from 90% in 2020 to 98% in 2025. And last but not least, we again achieved excellent results in ESG ratings and rankings in 2025, including an EcoVadis gold medal and a top A score for climate in the CDP 2025.

Now turning to our full year outlook. The guidance ranges imply further top and bottom line growth in fiscal 2026 despite a persistently volatile environment. We expect organic sales growth to be in the range of 1% to 3%. The adjusted EBIT margin is expected to come in, in the range between 14.5% to 16% and adjusted EPS at constant currencies is expected to show a low to high single-digit percentage increase.

Marco will now elaborate on the full year guidance in more detail. And then also for sure, in a couple of minutes, he will do that.

Yes. Thanks, Carsten.

Marco, let me hand over to you because you will lead through the financials in 2025. And after that, I will come back, and I will talk about how we are poised for further profitable growth. You see the CFO is on feet. And with that, I hand over to you, Marco.

I would say I'm fast, but that's maybe a better expression. But thanks, Carsten, and good morning to everyone in the call also from my side. Building on what Carsten already shared, let me provide some more color on the drivers of the group sales performance in fiscal 2025.

We delivered positive organic sales growth of 0.9%, which was driven by pricing in total for the group. And after a softer start into 2025, we saw an acceleration throughout the year and with positive volumes in both business units in the second half. Acquisitions and divestments reduced sales by 1.7% in the full year, reflecting the recent divestment of our Retailer Brands business in North America. FX was a headwind of minus 4%, reflecting, in particular, the weakened U.S. dollar and related currencies. In nominal terms, sales amounted to EUR 20.5 billion, thus 5% below the prior year.

Now turning to the drivers in the respective regions in more detail. And starting with Europe, where sales came in at minus 1.6%. Adhesive Technologies was slightly below prior year with all 3 business areas showing a muted performance. Consumer Brands recorded a negative development in Europe, reflecting the challenging market environment, particularly in Laundry & Home Care, while Hair showed good growth. North America was also below prior year with minus 1% in full year 2025. However, here, showing a sequential improvement in the second half with both business units shifting to positive territory for organic sales growth.

Adhesive Technologies was negative in full year 2025. While Craftsman, Construction and Professional achieved good strong growth, Mobility and Electronics declined slightly and Packaging and Consumer Goods was below prior year. The Consumer Brands business recorded a slight decline in fiscal 2025, mainly due to Laundry & Home Care, while Hair also showed good growth.

Moving on to Asia Pacific, where we achieved strong organic sales growth of plus 3.4%. Adhesive Technologies delivered very strong growth, primarily driven by strong growth momentum of our Electronics and Industrial businesses. The negative development in the Consumer Brands business was due to Laundry & Home Care, while Hair achieved positive growth. India Middle East, Africa showed double-digit growth of around 12%, which was supported by both business units. Finally, in Latin America, sales were slightly below prior year with both business units posting a slight decline. In Adhesive Technologies, this was mainly due to Mobility and Electronics. And in Consumer Brands, Laundry & Home Care was below prior year, while Hair showed very strong growth.

Now turning to Adhesive Technologies in more detail. We achieved sales of EUR 10.7 billion in fiscal 2025. Organic sales growth was 1.5%, supported by balanced price and volume mix. The adjusted EBIT margin came in at 16.7% and thus slightly above prior year. Overall, Adhesive Technologies delivered a good top line development despite the demanding environment in fiscal 2025. Pricing remained robust, which reflects the strength of our market position and a broad portfolio. Volume development was also positive with an overall stronger volume development in the second half of the year, also supported by a partial reversal of the negative working day impact that we saw in the first half.

In Q4, OSG reached 0.9%. However, this was a decent result when comparing in particular to our peers. The adjusted EBIT margin continued to be strong year-over-year in 2025 and was supported by innovations, supply chain efficiencies and a positive mix. And now to the performance in the individual business areas of Adhesive Technologies, where we saw different dynamics. Mobility and Electronics here, the main growth driver -- that was the main growth driver throughout 2025 with strong growth of 3.3% in the full year. The increase was mainly driven by double-digit growth in Electronics and very strong growth in Industrial. This could more than offset the muted performance in Automotive, where we faced a persisting challenging market environment.

In Packaging & Consumer Goods, sales came in slightly negative in full year 2025 and Q4. And while Consumer Goods achieved positive growth in the full year, packaging was below prior year due to overall lower demand. Finally, Craftsmen, Construction & Professional delivered positive organic sales growth of 1.3% for the full year, fueled by good growth in Construction as well as manufacturing and maintenance, while Consumers and Craftsmen recorded a positive development.

Turning now to Consumer Brands. The business generated sales of EUR 9.7 billion in fiscal 2025. Positive organic sales growth of 0.3% was driven by good price development. Profitability also improved significantly versus prior year. The adjusted EBIT margin came in at 14.5% and thus nearly 1 percentage point above prior year.

We saw an acceleration in organic sales growth in the second half of the year versus the first half. And besides positive pricing in full year 2025, we also saw positive volumes in both Q3 and Q4. As expected, particularly Q4 benefited from more innovations and a stronger sell-in. After record high gross margin in 2024, we saw further improvement in profitability, which was driven by the realization of more than EUR 100 million incremental savings in 2025, ongoing portfolio valorization and a positive mix. At the same time, we sustained our elevated investment levels in regards to our brands and to further fuel our top line growth.

Now turning to the performance by business area. In 2025, Laundry & Home Care recorded a slight decline in organic sales of minus 0.9%, mainly due to weaker Laundry Care business, which reflects the muted consumer sentiment in key regions. However, Laundry & Home Care saw a noticeable improvement in the second half with Q4 posting strong growth supported by both businesses. While Fabric cleaning showed a decline in total fiscal 2025, Fabric Care achieved significant growth. In both categories, our top brands, Perwoll and Persil delivered strong growth, supported by recent innovations such as the Persil Giant Disc. The Home Care business posted good organic sales growth, particularly driven by double-digit sales increase in the hand dishwashing category.

Moving on to Hair, which was the main growth driver in the Consumer Brands business throughout 2025, delivering 3.2% organic sales growth. The Consumer business posted strong growth, particularly driven by very strong growth in coloration and styling. Recent innovations and strong marketing support for our top brands, and Creme Supreme from Schwarzkopf, as well as be supported this positive development. The Professional business showed good growth in the full year with a clear acceleration in the second half, primarily driven by North America and Europe. Finally, organic sales growth in other consumer businesses remained below prior year in 2025, mainly due to Body Care in North America and Europe.

Back to the group level again, I would like to share some details in regards to the adjusted income statement. We increased our adjusted gross profit by 50 basis points, now reaching 51%. This increase was driven by ongoing measures to reduce cost and enhance purchasing, production and supply chain efficiency as well as a positive business mix in both business units. In addition, the ongoing valorization and the continued realization of savings supported the margin improvement in Consumer Brands.

Marketing, selling and distribution expenses as well as R&D and admin expenses in relation to sales remained more or less on prior year levels. Other operating income and expenses had a neutral impact as a percentage of sales. As a result, the adjusted EBIT margin increased by 50 basis points to 14.8%.

Moving on to the bridge from reported to adjusted EBIT. At EUR 2.8 billion, reported EBIT was slightly below the previous year level. At constant exchange rates, however, reported EBIT was ahead of last year. Onetime income of EUR 39 million was mainly related to gains resulting from a previous divestment. Onetime expenses of EUR 137 million were mainly related to acquisition-related costs, a pension liability as well as costs in the context of the Consumer Brands merger. Restructuring charges amounted to EUR 112 million with the majority related to the optimization of our production and logistics footprint in both businesses. As a result, adjusted EBIT came in at EUR 3 billion and with that slightly below the prior year level. But also here, at constant exchange rates, adjusted EBIT was clearly ahead of plan.

Taking a closer look at the bridge leading to our adjusted EPS. The adjusted financial result amounted to minus EUR 57 million and thus improved compared to prior year level. The adjusted tax rate stood at 25% and thus in line with prior year. And finally, adjusted net income after minorities came in at EUR 2.2 billion. This translates into adjusted earnings per preferred share of EUR 5.33, representing an increase at constant currencies at 4.7%.

On to our cash KPIs. Net working capital as a percentage of sales was slightly above the prior year level. Free cash flow was again strong and came in at EUR 1.9 billion. As just mentioned, high net working capital levels had an impact and also FX translation effects were negative. At EUR 100 million, our net financial position continues to be very strong and even further improved versus prior year despite significant cash outflows for the dividend and the share buyback program. Overall, we continue to have an excellent financial foundation, which gives us ample room to further invest in measures to accelerate growth, including M&A.

We also offer attractive shareholder returns. Over the past 2 years, we have increased our dividends by more than 10% and stick to our payout ratio of 30% to 40%. Since the IPO back in 1985, Henkel showed a long streak of growing or stable dividends. We will propose a higher dividend of EUR 2.07 for the preferred share and EUR 2.05 for the ordinary share at our AGM in April. This represents an increase of 1.5% versus prior year.

In addition, we also launched 2 share buybacks. The second share buyback is currently being executed and expected to be concluded by the end of Q1 at the latest. As end of February, more than EUR 900 million have been bought back. In total, Henkel distributed more than EUR 100 billion to shareholders over the last 10 years.

Overall, also in 2026, we continue to operate in a highly volatile environment. With geopolitical tensions and tariffs having an impact on trade flows, raw material prices and foreign exchange markets. GDP is expected to grow at a moderate pace in 2026 at around 2.5%. The Industrial Production Index, the IPX, indicates moderate industrial production growth of around 2%, while consumer sentiment remains subdued. Inflation rates are expected to remain on elevated levels.

This leads me to a more detailed look at our outlook for fiscal 2026 in which we expect further top and bottom line growth. On group level, we expect organic sales growth of 1% to 3% with 1% to 3% in Adhesive Technologies and 0.5% to 2.5% in Consumer Brands. When it comes to the adjusted EBIT margin, we expect a level of between 14.5% to 16% for the group. For Adhesive Technologies, we expect our adjusted EBIT margin to come in between 16.5% and 18% and for Consumer Brands between 14% and 15.5%.

With regard to input costs, we anticipate a low single-digit negative impact on sales. The same holds true for currency effects with a slightly more pronounced impact to be expected on bottom line versus top line. For the development of our adjusted EPS at constant exchange rates, we expect an increase in the low to high single-digit percentage range. From a top line phasing perspective, on group level, we see a softer start to the year and currently assume Q1 to come in within the lower half of the full year guidance range, reflecting the muted consumer sentiment and the slower industrial offtake, but also the geopolitical challenges. The business units are expected to come in between somewhere within the lower half and around the midpoint of the respective annual guidance ranges.

And with that, I would like to hand back to you, Carsten.

Thank you, Marco. And today, as we are also reiterating our midterm ambition, I would like to focus on Henkel's key drivers for profitable growth going forward, so not just for the full year 2026, but also beyond. As you may know, we are celebrating Henkel's 150th anniversary this year. With a pioneering spirit and building on a strong legacy plus all the more recent initiatives, we have successfully executed. We have set the scene for further profitable growth, and we are ready for the future. With all the initiatives we have successfully executed over the past years, we have ensured a strong and a healthy solid platform from which we can sustainably and profitably grow in the coming years based on our 2 attractive businesses and their leading positions.

You are well acquainted with our midterm ambition. However, I would like to point out to you some of the key building blocks. Both businesses not only have leading positions, but they also benefit from global megatrends and optimized portfolios. Leveraging on our investments in R&D and supply chain, driving innovations and thereby building on our global footprint and a strong R&D network will all contribute. With our strong financial position, we have ample room to invest into the businesses and to do M&A while at the same time, enhancing shareholder returns through attractive dividends but also share buybacks.

Looking at Adhesive Technologies. In Adhesive Technologies, we hold leading positions globally in a broad range of market segments, covering mobility and electronics, packaging and consumer goods as well as craftsmen, Construction and Professional. Overall with that, serving more than 800 different industries.

Let's take a look at the key drivers of profitable growth in Adhesive Technologies, which I will walk you through in more detail on the next couple of slides. Starting with the global megatrends, which include mobility, connectivity, digitalization, urbanization and also sustainability. All of them provide great opportunities to further drive the growth of our business here. In addition, we will continue to invest in high-growth markets with above-average growth opportunities. Some examples on that, take the MRO business as an example. We significantly expanded our presence in this highly attractive adjacency, including the acquisitions of Critical Infrastructure and Seal For Life. These additions have helped us build and building a stronger and broader MRO platform, which today represents around 20% of our craftsmen Construction and Professional business. The segment continues to show high single-digit market growth, and our businesses have been performing strongly. We will continue to build on this momentum by further strengthening and scaling our MRO platform.

Second example, Electronic Solutions, where we expect above-average growth driven largely by AI-driven demand such as data centers. The rise of AI will lead to double-digit growth in the coming years, particularly driven by AI-related applications as, for instance, in the area of advanced packaging and data centers. At Henkel, we will focus on localizing manufacturing and R&D to match customer footprint and geopolitical fragmentation.

The last example is in aerospace. Here, Aerospace is expected to capitalize on high demand and full order books in the coming years, outperforming markets with high single-digit growth by expanding capacities driven by higher demand, we at Henkel can benefit from this trend. As you can see on this slide, our Adhesive Technologies business can also build on technology leadership and a strong global manufacturing footprint, ensuring customer proximity at a global scale. This also comprises our unique setup with more than 3,000 R&D experts globally. We leverage our technology-agnostic approach across more than 800 different industries and thereby building on strong and scalable technologies.

Some examples. In Brazil, our new innovation center underlines our commitment to innovation and business growth in Latin America. In India, our site supports the country's fast-growing industry, aiming to meet demand while enhancing local production and innovation. On our U.S. site in Madison Heights, we support OEM and battery manufacturers with advanced material application capabilities for EV components. And in Shanghai, we enhance supply capacity and innovation capabilities to meet the demand of fast-growing industries such as electronics, automotive and medical and aerospace. But we also leverage our unique value chain position to drive customer-centric solutions, which are key to our business.

Across industries, we are working side-by-side our customers along their value chain, for example, here in the automotive industry. We start at the design table, continue by innovating on site and offer on-site testing and even up to offering solutions to specific production needs. This is a strength we leverage at global scale.

Increasing content share is another example of how we can enhance further growth. If you think of a smartphone, the average number of tanker solutions in one end device has significantly grown and will exceed from currently around more than 50 solutions to around more than 80 solutions by 2030. The shift from combustion engines to EV vehicles also offers attractive growth opportunities. The sales potential in an electrified vehicle is more than 2x higher compared to a combustion vehicle due to the fact that we can offer more solutions into a vehicle that has a battery system inside.

And coming back to the megatrend of sustainability, enabling our customers to achieve their sustainability agendas is also a growth driver. The share of our portfolio's products with significant positive contribution in the areas of climate, circularity, safety and nature has increased already over the past years to now around 21%. With our innovations and solutions, we are setting new industry standards for circularity and carbon footprint reduction, as you can also see from the example on the right hand of that slide.

Besides driving organic growth, M&A, as mentioned before, of course, remains an integral part of our growth agenda to enable future sustainable, profitable growth. In Adhesive Technologies, it's about strengthening the existing portfolio by expanding into high-growth markets and integrating scalable assets into our established core portfolio. And in addition, we are also seeking opportunities to expand into high potential growth markets by adding attractive adjacencies with similar technologies and business models.

In recent years, we successfully added nearly EUR 1.5 billion of profitable sales. We are delivering on what we promised along our clearly defined growth agenda. With the acquisition of Critica Infrastructure and Seal For Life, for instance, we enhanced our offerings in this highly attractive MRO business. The MRO business, as mentioned before, in the meantime, accounts for around 20% of our construction business.

Besides expanding existing businesses and with that the core, we are also successfully expanding into new and highly attractive adjacencies. With the acquisition of ATP, we are entering the attractive tapes market, which offers clearly above-average growth rates, especially in the water-based segment. The acquisition of Stahl adds complementary flexible coating capabilities and further strengthens our R&D capabilities. And building on all of these growth drivers, we are poised for further profitable growth in the years to come, and we are confident to reach our midterm financial ambition.

Now after the Adhesive Technologies part, we move to Consumer Brands. Particularly in our two key global categories, we can build on leading positions in our active markets globally, an excellent foundation from which we can further grow the businesses going forward. Also in Consumer Brands, we see clear growth drivers contributing to our financial midterm ambition. And also here, let's have a look in more detail.

Starting with the core of our strategy, driving better and bigger. Addressing both profitability and growth supported by digitalization and AI are the key elements. In the first step, as you know, we focused on getting better by optimizing our portfolio, driving value realization and increasing the efficiency of our organizational and our supply chain setup. Now the focus is equally on better and bigger.

With the successful transformation of the Consumer Brands businesses, we have laid the foundation for solid, sustainable and profitable growth in the years to come. We fundamentally reshaped our business, streamlined our organizational setup, actively shaped our portfolio, optimized our supply chain and enhanced operational excellence globally. All of this was achieved 1 year earlier than originally planned. Accordingly, we were also able to overachieve on the targeted savings by reaching EUR 540 million instead of EUR 525 million by the end of 2025.

We significantly improved the quality of the business across multiple dimensions. As you can see on the chart, including impressive improvements in profitability, while at the same time, investing more behind our brands. Within just 3 years, gross margin improved by 1,200 basis points and our adjusted EBIT margin by 620 basis points. Organic sales growth in that time frame was around 3% despite all the changes in the organization and the portfolio. And also, net working capital significantly improved. And as a result, we also see materially improved rankings in both FMCG relevance as well as in retailer perception on which we can build on going forward.

At the end of 2025, we made also a fundamental change, most probably the biggest one after the merger. And implemented a new regionalized setup of the marketing and R&D teams, which is already live. With a new regionalized setup, we are empowering the regions and with that, enhancing customer proximity, faster execution and speed to the market. This also helps to foster all the regional brands we have in our portfolio. On a global organizational level, we will continue to focus on long-term breakthrough innovations and leverage scale where it matters.

And similar to Adhesives, with the portfolio and the setup we have, we will be able to even better translate global trends such as sustainability, health and well-being, convenience, digitalization and premiumization into consumer-centric innovations.

Leveraging our leadership in around 270 country category positions across the portfolio, including iconic brands such as Persil and Schwarzkopf will also be one of the growth drivers going forward. In Laundry Care, we sharpen the core by driving innovation and valorization. In Home Care, we set new industry standards by leveraging strategic investments and advanced technologies. And in hair, we capitalize on our expertise in professional and consumer while expanding the global footprint by closing white spots.

Now turning to our top 10 brands. They continued to show strong organic sales growth in 2025, delivering an outperformance of more than 300 basis points versus consumer brands as a whole. We expect this trend to continue and the sales share of currently around 60% to increase further in the coming years. And valorizing the portfolio is also one of the key drivers for profitable growth. By driving relevant innovations, catering to unmet consumer needs, creating new value pools and enhancing trade up into premium price tiers, we will continue to enhance our iconic brand power and drive value in the core.

Also like in Adhesives, turning to our strong global R&D network, which helps us to further drive our technology leadership. And here, we will continue to invest into the business a good. More recent example is the expansion of our footprint of houses of hair, underlying our clear ambition to become the Authority in Hair, building on both the professionals and the consumer part. Last year, we implemented 5 new houses of hair globally.

And in order to become even more efficient and impactful and with that power growth, we also increasingly make use of digital and AI capabilities. And to give you some tangible examples, AI models can be deployed to accelerate product development. Our AI virtual assistant can support salons and hair dressers in the field of hair color knowledge, and we can make use of AI to generate marketing material in a really cost-efficient way.

And besides organic growth opportunities, we will also continue to pursue attractive M&A opportunities to enhance growth. And as shown in the past already, we will continue to strengthen our core categories and close with white spots with strategic acquisitions.

Good blueprints, were the acquisition of Shiseido, Earthwise and Vidal Sassoon. And just recently, we signed an agreement to acquire a leading and a fast-growing hair care and styling brand in the U.S. called, Not Your Mother's offering a broad range of shampoos, conditioners and treatments and styling products. Its innovative portfolio includes well-known collections such as Curl Talk, CleanFwek, Bechbape, Plum for Joy and all Eyes on Me. In fiscal year 2025, the brand generated approximately EUR 190 million in sales and delivered a strong gross margin, reflecting its robust market position.

Taking all these growth drivers into account, we are poised for further profitable growth in the years to come, and we are confident to reach our midterm financial ambition also in Consumer Brands.

And with this, let me close today's presentation with the key takeaways. Overall, Henkel recorded a robust top line performance and a further increase in profitability despite a muted environment. We successfully concluded the integration of Consumer Brands 1 year ahead of plan, reaching EUR 540 million savings, plus more than we had originally targeted. We also offer attractive shareholder returns by our share buyback and increasing dividends. And furthermore, we are quite successful and reached agreements for several attractive acquisitions in both business units. Our full year '26 guidance implies further top and bottom line growth, and we also reiterate our midterm ambition. We have a strong foundation, and we are poised for further profitable growth in the years to come.

And with that, handing over to the Q&A.

[Operator Instructions] The first question comes from Warren Ackerman from Barclays.

Warren Ackerman here at Barclays. A couple for you. First one is just on the margin guidance, the 14.5% to 16%. Just wondering whether you can share with us what would get you to the top and the bottom of the range. I'm slightly surprised that the raw material guidance is up only low single digit. Just wondering what natural gas and oil price is embedded into that guidance? And maybe can you tell us what exposure you have at natural gas and hedging just to try and sort of get under the hood of what you're assuming given the recent rally in energy costs?

And then secondly, I think there's a bit of confusion about the Q1 softness on the guidance. Is that -- because it looks like an easy comp, is that related to macro? Or is it related to kind of sell-in, sellout on consumer brands? Just trying to understand what's driving that softness specifically? And can you maybe confirm whether it will still be within the range at the bottom end of the range. And so if you can just sort of outline that would be super helpful.

Warren, only for clarification, I couldn't get it. The second question was related to...

The Q1 softness, what's driving that? Is it Adhesives rolling over? Is it consumer brands? Is it macro? What is it?

Thank you, Warren. So maybe let's start with the first one related to the margin guidance. Maybe I start, and Marco will go a little bit more in detail because you're also asking for hedging and specific gas or other materials. When we made the guidance end of January, beginning of February because it has to be also part of our annual report. For sure, the situation at what we currently experienced in Middle East was not there in terms of a military conflict. And based on the volatility and the uncertainties we are seeing since really a couple of quarters or years, we have, as we have done it also last year, taken a little bit of a broader range within our guidance, be it from a top line perspective, but also from a bottom line perspective. And that's the reason why we have made up the guidance for the bottom line for 14.5% to 16%.

And I have to tell you, I think it's too early to tell you exactly in which direction one will go. The mid of the guidance is the base case for us and also catering for this volatility and the things are changing so dramatically and so fast that I think it would be not appropriate now to give you details on these kind of things. But what I can tell you, and I think that's valid now for 4 years in a row. We promise and we deliver on that what we are doing, and we reached last year a margin of 14.8%, which was 50 bps up in comparison to the year before. And the guidance range reflects the clear point that we also want to further drive the margin up in the year 2026 with all the challenges which we are having.

And before talking to the Q1 softness, I give back to Marco maybe for some more details on certain raws or impacted like gas, what you just said.

Warren, so I mean, to start with, at the moment, we see the volatility in oil prices and also energy prices sitting within our guidance ranges, just to also put that a bit into perspective further what Carsten said. So therefore, on the natural gas side to get to that part. So that would go -- come to the point of energy cost and energy cost in our production that accounts for less than 2% of our cost of goods. So we are not energy intensive, and that's why that gas exposure is rather limited on our end. And even here, we are approximately 70% hedged. So low share in our cost of goods and roughly 70% hedged. So from that point of view, that should not have a big impact in our cost structure in 2026.

And on the oil side, that's too early indeed to say what is the annual impact. That depends very much on how long that is going to last, and you saw the volatility just in the last 2 days. So very difficult to predict and indeed, it depends on how long that lasts. And also to note, Henkel is not buying oil, obviously, directly. So we buy derivatives. And therefore, that impact on our derivatives is also already lower than the oil might suggest. And when we look at our total raw material basket, roughly 1/3 of our raw material basket depends directly or indirectly on crude oil prices. So that's maybe another data point I can give you. And then it's also the time it takes to then arrive in our P&L that there is a certain time lag. As I said, we buy derivatives and not all directly. There are some stocks. So approximately, it takes roughly 3, 4, sometimes even 5 months that, that volatility really arise. So that's a couple of data points I can give you. But again, we see the current volatility still sitting into our annual guidance, obviously. Otherwise, we wouldn't have communicated on that as we did. And then we have to see further and look at the development of the situation closely and then see whether that has to be changed.

Thank you, Marco. So Warren, to your second question, the softness or the softer -- I have to say, it's not softness. It's a softer start in Q1. You have heard Marco, first of all, talking that, that will be still in the guidance range of the 1% to 3%, which we have been stating. It is in the lower half. But why a little bit weaker? First of all, if you look at HCB, HCB OSG in Q4, what we had, you cannot -- or cannot be extrapolated to Q1 because Q4 benefited from a stronger sell-in due to back-end loaded innovations. I think you may remember, we talked about that, that the second half of the year in HCB would be stronger with innovations and especially also here the Q4 that was, for sure, also impacting that in terms of a higher sell- in Q4. And overall, we are still confronted with a quite weak consumer sentiment in the major majorities of the world, which is, for sure, Europe and North America. And for sure, the Middle East conflict today is not helpful on that. And for HAT, for adhesives, there is overall still a quite muted industrial demand. And I think these are the reasons why we see a little bit of a softer start to the year. But again, as I would like to point it out again, within the range what we have given for the full year. I hope that helps, Warren.

The next question comes from David Hayes from Jefferies.

I'm going to clarify a couple of things on those answers and then ask a question, if I can. So just following up on that last answer. Is it possible to quantify at all the amount of sell-in impact in the fourth quarter in terms of the innovation channel pipe fill? And then just also to clarify, just to your point, you put the outlook together at the end of February pre some of the war situation. So just to clarify that the guidance on the top line effectively doesn't take into account at this stage any potential impacts from an ongoing geopolitical uncertain environment. And then my actual question was actually on the free cash flow. So you called out working capital headwind relative to last year. Notably, there's a very big swing in trade accounts payable from about plus EUR 200 million to an outflow of EUR 255 million. So I just wonder whether you can be providing specifics on what that dynamic was in terms of the free cash flow generation?

David, so I'll take your first two clarifying topics. Marco will, for sure, take the free cash flow, net working capital topic. So in terms of -- I fully understand your question in terms of quantifying Q4 or the impact of innovation. But please do understand, I think we are not disclosing or talking about the details of that. I think that would be too detailed in that context. That's number one. Topic number two, for the outlook, maybe I'm not 100% understood you, but to phrase it again, so we put together our guidance at the end of January, not at the end of February. So that was the point. And in that context, for sure, the military conflict in Middle East was not -- or could not be foreseen at that point in time. So that is clear. On the other side, I told you that we have broader ranges, which we have been given for top and bottom line, the 1% to 3% and the 14.5% to 16.5%. And that's for sure, that range caters for certain volatility. And therefore, it also caters for the current military conflict in Middle East, which comes on top. But for sure, we all don't know how long that will last and what the detailed impact that will have. But we feel good with our guidance or with our broader guidance we are having in order to go through the year 2026. I think this is what we see as of today, David. For sure, if things are changing, then we would also to reflect that and would come back. But today, that's our view. I hope that helps. And with that, Marco, maybe on the free cash flow/net working capital topic.

Yes, indeed, David, trade accounts payable have been lower end of this year, end of 2026 and end of 2025. So first that number is obviously a picture in -- over time of one specific date in the year, so we compare 31st December '26 versus '25. We had rather an above-average level in end of 2024. And then end of 2025 is rather the opposite. And that was coming from that we also took measures to reduce inventories, in particular in the second half of the year. And then for a certain temporary time, you actually -- that results also in a lower trade payable balance that we then recorded at the end of the year, and that shows now that effect also on the cash flow.

So it's a bit of phasing over time. and driven end of last year, in particular by our measures to reduce also inventories, and that was actually good. So that puts us in a better position in 2026. And maybe another note, when you look at the overall free cash flow movement, and I tried to say it also in the call, there is also an impact from FX translation in the numbers when you compare year-over-year free cash flow due to the fact that in particular, dollar weakened. So that also had an impact also on the delta to 2024. I hope that gives a bit of color.

The next question comes from Christian Faitz from Kepler Cheuvreux.

One question, please. For '26, how strong do you see pricing for your Consumer Brands portfolio? There's lots of evidence about consumers trading down. Would you see the Henkel consumer portfolio changing from this with a broad brand offering? Or is your forecasted 0.5% to 2.5% organic sales growth for this segment more a volume effect?

Christian, so first of all, if you see the guidance of HGB with this -- for the top line 0.5% to 2.5%. For the full year overall, we expect price and volume in positive territory. That's for HGB. That's the same also for HAT as a side remark. And I think I said it also in the morning in an interview with I think it's clear that price increases are only related or can only be rated in these days with really substantial changes in an innovation setup, what you're delivering to the market.

You need to have either a technological or a real benefit the consumer can see and expect. And I think then he or she is willing also to pay for that. And I think that is also something reflected which you see in our top 10 brands where we have been clearly articulating for 2025, we have been seeing price and volume developments, positive developments. And I think that's also valid for 2026. The price component, even if then positive, can only come via clear innovations.

And the rest is clear based on the situation we are facing, the consumer sentiment. I think it's clear that we need also to have offerings for value for money parts. And this we have in our categories, be it in Laundry & Home Care, be it in Beauty, in means and Hair. And I think that's the setup how we are going forward for the year 2026. Hope that helps.

The next question comes from Olivier Nicolai from Goldman Sachs.

I got two questions, please. First, on Mobility and Electronics. It slowed sequentially in Q4 following a very strong Q3. What drove this slowdown? And are you seeing -- how are you seeing the automotive end market developing across the different regions? And just a follow-up on Laundry. Would you be able to comment on the current competitiveness in Europe and the U.S.?

Olivier, so first of all, to your point on mobility and electronics, I have a little bit of different view when I look at your -- the question or the totality of your question. I think we have been seeing in electronics a fantastic development through the year 2025, and we will also see no changes in that context for 2026. We expect to remain within a weak environment, but electronics to be really strong. And you cannot look from my point of view on a quarter to make any tendencies for the mid or for the next year.

As I said, it was not only quarter 3. Quarter 1, 2 and 3 were extraordinarily high. Q4, a little bit softer in that context, but the overall situation for electronics for this -- sorry, for last year and going forward also for -- not only for next year, but also the years to come is from our point of view, very positive in terms of that we see really positive developments and great opportunities to participate that I also alluded to that during the presentation when I talked, for example, about the mobile phones from 50 solutions in the past in around 2020 until now more than 80 solutions. I think we are overproportionately also participating in that development. And I think that makes me very confident that electronics also in '26 will have a very good year in that perspective or in that context.

Moving to your second part, the Laundry situation and the question of competitiveness. I think here, the situation is we have seen a strong growth in Q4 despite challenging market dynamics and the intense competitive environment you have been alluding to. Laundry Care showed in general, a good growth, while Home Care recorded an even stronger growth in that. For sure, it is also related to the point I mentioned in a question or in an answer before that we benefited in Q4 from more innovations and a stronger sell-in with some shipments already made at the end of '25 instead of '26. And the good growth in Laundry Care was mainly driven by very strong growth in Fabric Care and in fabric cleaning. And yes, the competitive situation, what I see today has not significantly changed.

Why not? Because also the consumer sentiment and the impact of tariffs and all the things that are happening are impacting consumers. And therefore, there is currently no significant change what I'm expecting on that front. I hope that helps.

The next question comes from Celine Pannuti from JPMorgan.

My first question, coming back on the Middle East. I think it's around 5% of sales. Could you confirm that and confirm how much sales you have in And EMEA as a region has grown 12% in '25. How much Middle East grew, please? And in terms of -- I understand now it's difficult maybe to bake that into your guide, but are you seeing any impact on supply, where I understand that some of the petrochemical ingredients like lab are mainly produced in that region? The second question would be on M&A. If you could help us understand, I think you said EUR 1.2 billion of sales from M&A, the impact that we should expect on EPS this year and on a 12-month basis as well as the impact this may have on your margin on a 12-month basis?

Celine, happy to take your questions, maybe starting with the Middle East or EMEA topic. So based on our 25-year results, EMEA sales share is around 10% with a balanced exposure in both in Adhesives and in Consumer Brands. And the sales shares of the affected countries in the Middle East is roughly 5%. And I think that is the overall, I would say, answer to that question.

And before I hand over to Marco for the supply and also for some more details on M&A, let me elaborate a little bit on the M&A topic overall. As you're rightly saying, around EUR 1.2 billion is the turnover related to the 4 announced acquisitions in the last couple of weeks less months, 3 in Adhesives and 1 in Consumer Brands. And the 3 in Adhesives, especially the 2 in Adhesives, ATP and also Stahl, we are going with that into new, I would say, adjacencies for Henkel. The one is tapes, and I slightly touched that specialty tapes in the point of the water-based segment, which is for us in terms of two factors relevant. First, it's growing quite fast, the water-based part within the tapes. And secondly, we have quite significant positive impacts also on that to our strategy of sustainability. And definitely, the water base is significantly faster growing than the rest of the tapes. So that's for the new adjacency of tapes. And the other one is related to specialty coatings.

Also for us, a new adjacency also here, good growth rates in terms of a midterm perspective, and these were the main reasons why we're going into these 2 segments from an Adhesives point of view. And for the consumer part, Henkel Consumer Brands, the acquisition of Not Your Mother's is really a leading brand in care and in styling in the U.S. We have also cleaned quite significantly our portfolio over the last couple of years, also with quite a high impact on the portfolio of North America, and that is for us to build further size and scale in a category with hair, where I think we are showing now since a couple of years that we have the ability to win and to grow.

That's me maybe for the introduction. And with that, handing over for the maybe details in terms of the impact of these acquisitions in 2026. Marco will give and also on your second question, which was the guidance and the supply on certain materials. Marco?

So to your part of the M&A impact, of course, the deals haven't closed yet. So that's why, for sure, we will include that in our guidance formally when also the deals close. So what we also said is we talked about the annual sales impact the deals can have. So from a top line perspective, we do expect that can contribute a EUR 500 million plus sales contributions in 2026 already. But for sure, depending on the time when closing is coming, and that depends very much on all the different, for example, antitrust procedures we have to undergo.

Then on the bottom line impact this year, that will, for sure, be EPS accretive in this year. And we don't want to put out now formal guidance on that one. But the order of magnitude that I could imagine is roughly 1 percentage point. It could add also an EPS growth. And then in next year, that will then also be a low single-digit EPS growth accretive that we could expect. So that's what at the moment would be my order of magnitude that I can give you on that.

And then on the raw material side, I think I commented on it beginning of the call. So on Henkel, the impact from crude oil price increases, what we have to note is roughly 1/3 of our raw material portfolio is coming out of clear petrol derivatives. So it's not that our entire portfolio is dependent on crude. We, for sure, also don't buy crude directly. We buy derivatives. And in that bill of material of our suppliers, crude oil is one input, but not the only one. So that's why the impact on Henkel that will be, for sure, more limited than maybe the pure crude oil price change suggests. But really to say what is the magnitude of the year is too early, what we see -- have seen currently that we can compensate within our guidance range and everything else needs to be seen how deep and long that conflict actually lasts.

Good. Thank you, Marco. I hope that helps, Celine.

Yes. I just wanted to know whether there is a potential supply shortage on lab or is that not an issue?

At the moment, we don't have indication, no force majeure or anything that has arrived. So at the moment, our supply chain is still intact. That's what I can say at that point in time.

And then just one last thing on the margin impact on a 12-month basis, is it possible to understand the profitability on aggregate of the companies you have acquired?

I think on that one, we're going to communicate, as I said, when the deals close, that's not for now.

The next question comes from Tilly Eno from Morgan Stanley.

The first was just on your restructuring charges. You've guided to quite a high level of restructuring charges again in 2026. But with the consumer merger having closed, just wondering what are the key drivers behind that? And does that include any of the acquisitions which are yet to close? I'm assuming not because they're not an EPS guidance, but would just be good to get some clarification there. And then the second question, just to clarify again on the Middle East. Would it be fair to assume that the Middle East has been growing at a similar pace to the overall EMEA region? Or could you give any more color on the performance of that subsegment within the region?

So clearly, I'll start with the second one. The Middle East is slightly lower than the EMEA growth. And the margins, I think, is important are clear below the average of the company in that context. Maybe that's to your second question. And Marco, the first one was related to restructuring charges.

So on the reduction side, we incurred is related to a number of restructuring projects in the area of supply chain and production. And as we said, that also was in the focus of our Consumer Brands merger initiative and program. So that focus very much on production supply chain. And obviously, the program has finalized only end of the year. So during the year, we, of course, incurred further charges, but it's not related only to Consumer Brands also in Adhesive Technologies, we, of course, initiated measures to increase efficiency also here with a focus on supply chain and production.

And just to clarify, it doesn't include the acquisitions which are yet to close?

No, restructuring charges from that, that will arrive in the years to come. So it's not a subject of 2025.

The only thing maybe, Tilly, to add and to have the full picture, for sure, based on the restructurings we did in 2025, we will have savings impacts out of the Phase 2 out of HGB, that means the supply chain and production setup also in 2026. But on that, I think it's enough now.

We will now take the last question that comes from Tom Sykes from Deutsche Bank.

Firstly, just on consumer, looking at it from a geographic point of view, would you be able to give some commentary around which regions you'd think would be above the group average in growth and which below? And are you assuming that the EMEA region grows above the group average in your guidance, please? And then just on the adhesives business, there's obviously been some talk of consumer electronics launches perhaps being delayed because of memory shortages. Are you seeing or do you expect any impact on your business of what's happening in the memory market, please?

Tom, so first of all, I think starting with the second question, the short and clear answer is no shortages, nothing what we see in our portfolio. I pointed out before that the electronics business is a business which has been growing fast and strong in last year, and I repeat, and that's the same approach and the assumption we have for 2026. So therefore, short answer, no.

To your first question in terms of the consumer business, we are not giving details in terms of what is growing and what is average or not the average. I think what I said before, the relevant countries in the Middle East are accounting for around 5% of the sales. And I said that is also -- there's no difference between HAT, Adhesives and Consumer. And they are significantly below in terms of the average of the margins we are having in both businesses. And yes, the Middle East growth is less -- smaller than the EMEA growth in that context. And I think more I can and I don't want to display in that point. I hope that -- for your understanding on that.

Yes. I mean, is there anything you can say just about pace of growth in the U.S. and Europe then and sort of regionally where the extra sell-in may have helped in Q4? And just regionally, any commentary about your run rates in Q1, please?

The launches, what we had were global launches overall. And I think I don't want to differentiate at that point on these launches, what they were over proportionately impacting one or the other region. I think one is clear, and that is what we stated. The consumer sentiment overall is still not different to the sentiment we have been seeing in 2025. And for sure that the current conflict, the military conflict in Middle East is not helpful on that. But as I said before, I think we are positive in terms of developing the year '26 with positive top and bottom line. And I would say here, I would let it stay on that level.

Thank you, and I highly appreciate all of your questions. And maybe before we come to an end, thanks for your questions. And with that, let me close today's call with reminding you that the upcoming financial reporting dates, we are looking forward to connecting with you again in May to be specific on the 7th of May for the Q1 results.

And with this, I would like to thank you for joining our call today. Have a good day. Take care. Goodbye. And for sure, we are looking also forward to seeing you tomorrow because Marco and myself will travel to London in the late afternoon and see you tomorrow if flights are supporting us, but it seems that we have chosen the right airlines in order to get to London. Thank you.

Good morning, and welcome to Henkel conference call. [Operator Instructions]

I will now hand over to Leslie Iltgen, Head of Investor Relations. Please go ahead.

Good morning, and a warm welcome to everyone joining Henkel's Q3 2025 Results Conference Call today. I'm Leslie Iltgen, Head of Henkel's Investor Relations. Today, I'm joined by our CEO, Carsten Knobel; and our CFO, Marco Swoboda. Carsten will begin with an overview of the key developments and highlights in the third quarter. Marco will then follow with a more detailed review of the company's financial performance. As always, following the presentation, we will open up the lines and Carsten and Marco will be happy to take your questions.

Before handing over to Carsten, please let me remind you that this call will be recorded and a replay will be made available on our Investor Relations website shortly after this call. By asking a question during the Q&A session, you agree to both the live broadcasting as well as the recording of your question, including salutation to be published on our website. Also, please be reminded that this presentation contains the usual formal disclaimer in regard to forward-looking statements within the meaning of relevant U.S. legislation. It can also be accessed via our website at henkel.com. As always, the presentation and discussion are conducted subject to this disclaimer.

With this, it is my pleasure to hand over to our CEO, Carsten Knobel. Carsten, please go ahead.

Thank you, Leslie, and good morning to everybody. Warm welcome also from my side joining our conference call today. As always, we do appreciate your interest in our company, and we look forward to answering your questions. Walking you through the key developments in the third quarter, we will elaborate on Henkel's business performance and the full year outlook in more detail. So let me move straight to the key topics and the highlights of the third quarter.

In Q3, we saw a clear acceleration in our top line development. Both business units recorded positive organic sales growth in the quarter. Starting with Adhesive Technologies, they show the positive price and volume development. The latter being supported by a partial reversal of the negative working day impact we had seen in the first half as well as by a continued strong performance in Electronics & Industrials. Consumer brands showed a positive volume development in the third quarter, which is encouraging to see. Also, the merger is in its final stages and we will have successfully concluded the transformation of this business unit by the end of this year. And with that, clearly 1 year ahead of plan compared to what we had originally expected when we started this journey.

From a regional perspective, North America stood out with good organic sales growth supported by both business units. Further, I can also confirm that we continue to see a strong gross margin and the bottom line development. In regards to share buyback, we are well on track, having executed around EUR 700 million as of end of October. And finally, when it comes to our full year guidance, the ranges remain unchanged.

Let's now take a deeper look into our Adhesive Technologies business where global megatrends like sustainability, mobility, connectivity, digitalization and urbanization create ample opportunities for further growth and allow us to drive customer-driven innovations across many different industries and applications. And more specifically, I would like to do a deep dive into the field of electronics today and showcase how these global mega trends translate into attractive growth opportunities with the solutions we offer.

Driven by key industry trends, such as the rise of AI, new ways to construct devices and components or even regulatory changes, such as the introduction of the right to repair, the different markets and industries where our electronic solutions came into play are undergoing a significant transformation. We can clearly observe how the scope and the value of material-based innovation is expanding. The rapid advancements of artificial intelligence, where we enable cutting-edge solutions for globally leading industry players, the evolution of component and device design, which leverages our materials expertise or the increasing regulatory focus on sustainability, which we facilitate through debonding technologies. These are only a couple of examples. Overall, Electronics Solutions are expected to show a high single-digit market growth potential in the coming years.

We are strategically well positioned to capitalize on this momentum through our comprehensive and diversified portfolio in Electronics Solutions across industries. A prime example is our Semiconductor Packaging business, which is forecasted for long-term exponential growth. To illustrate the breadth and the impact of our offering, I will now highlight 1 representative solution from 3 of our key -- from our 4 key segments: Semiconductor Packaging, Consumer Devices and Industrials. The immense rise of generative AI is reshaping the data center as well as the semiconductor landscape. As AI becomes more compute intense, there is a sharp rise in demand for advanced packaging, interconnects and thermal solutions that can support high-performance systems.

Our portfolio addresses these needs with cutting-edge materials for thermal dissipation, electrical protection and high reliability bonding, critical for next-generation GPUs, CPUs and memory modules, especially optical transceivers. These solutions are already being deployed by a globally leading semiconductor and data center players, helping them scale computing power, reduce cooling costs, and enhance system reliability. These positions -- or this positions us for double-digit growth through 2030, aligned with industry forecasts for AI-driven data center expansion.

Looking at Consumer Electronics. The push towards frameless immersive displays is driving demand for innovative materials that support flexible and edge-to-edge designs. Our proprietary potting solution for flexible display protection directly addresses this trend. It enables manufacturers to reduce bezel size, unlocking more active display areas, which is a significant gain in user experience and device aesthetics. Furthermore, it does not only improve design capabilities, but also increases device protection, enables a faster and simplified manufacturing process and even contributes to environmental responsibility by reducing the amount of conventional molded plastics and reducing CO2 emissions in manufacturing. This solution has rapidly gained traction, scaling to a double-digit million euro business within 2 years, outperforming market expectations and reinforcing our leadership in display material innovation.

And coming to our last example within Adhesive Technologies, the evolution of camera modules. The camera module market is experiencing rapid growth across several industries. This surge is driven by the rising demand for advanced imaging, especially in consumer devices and automotive applications. Adhesive Technologies is well positioned to support this evolution with the most robust total solution portfolio in the market. Our offerings cover all critical aspects of camera module and sensor assembly from lens bonding, active alignment and underfill to lens barrel attachment. These solutions don't only enhance functionality but also significantly improve reliability.

In automotive, for example, our one-step UV curve lens bonding technology enables our customers to reduce CO2 emissions and decrease manufacturing time, whereas traditional processes needs 2 steps in manufacturing. Ultimately, this is a leading -- well, this is leading to a double-digit growth for consumer devices and automotive camera solutions following the market projections through 2030.

And now moving to our Consumer Brands. I would like to highlight that by the year end, we will have successfully concluded the merger and with that, the transformation of this business. We fundamentally reshaped our business, streamlined our organizational setup, actively shaped our portfolio, optimized our supply chain and enhanced operational excellence globally. All of this was achieved 1 year earlier than originally anticipated at the time we announced the merger. And accordingly, we are well underway to reach the targeted net savings of at least EUR 525 million by end of this year. Overall, we significantly improved the quality of the business across multiple dimensions, while at the same time, investing clearly more behind our brands. We have successfully built a strong multi-category platform with enhanced efficiency and competitiveness.

For example, we materially improved our rankings in FMCG relevance in terms of size in Europe. In addition, the retailer perception rating in the U.S. significantly improved, which shows that we clearly strengthened our retailer partnerships. Overall, this demonstrates that we develop towards a more stronger and more relevant player in the industry. We have thus laid the foundation for solid, sustainable and profitable growth in the years to come.

In Laundry & Home Care, we are a strong global player with leading brands. In Laundry, we are ranked #2 globally in our active markets. We are shaping the future of laundry by focusing on selective strategic growth opportunities in key categories and also iconic brands. We are also leveraging our technology leadership to drive differentiation and value. In Home Care, we are ranked #1 globally in our active markets. We are driving market leadership by combining our investments with advanced technologies and setting new standards in dishwashing and toilet care.

Two good examples of how we leverage the growth opportunities with our top brands in Laundry Care are Persil and Perwoll. In Q3, Persil delivered positive growth driven by strong volume contribution. With the new Persil Giant Discs, which of course, also include the trusted Persil quality in combination with its innovative triple action deep clean formula, we address the need to meet modern laundry demand with heavy loads, tougher stains, malodor control and brightness boost of vibrant clothes. Each disc delivers 2x the cleaning power of regular detergent and enables efficient laundry care with fewer discs. In the first step, the Persil Giant Discs were introduced in selected markets in Europe, including countries such as our home market in Germany, Belgium, more countries will follow in the coming months.

Beyond value-adding innovations, Persil also stands out for its pioneering brand communication. Just recently, we launched our first generative AI-powered TV commercial in Germany, reimaging Persil's iconic, lady in white for a new era. This makes us a frontrunner and underlines our leading position in the laundry market. So let's take a look at the spot.

[Presentation]

In Fabric Care, Perwoll is our #1 brand and a great example for successful brand development, delivering double-digit growth in Q3 with balanced price and volume development. This performance is an excellent example of how we drive brand equity based on tech-driven innovations. We have constantly expanded our formulation portfolio with several different formulations, serving specific customer needs. And just recently, we launched the first Fabric Care product for all light colors, including white clothes based on our innovative triple renew technology. This innovation has further strengthened Perwoll's market-leading position with a presence now in over 40 countries. The key growth driver is our strategic focus on addressing geographical white spots, and further expanding our global footprint, including recent country rollouts in Egypt, the U.K. and South Korea. These initiatives have delivered strong benefits including market share gains of 190 basis points year-to-date in Fabric Care.

And with this, turning now to our top 10 brands. We continue to see strong growth momentum. In the third quarter, our top 10 brands delivered strong top line growth with both positive price and volume development. Our top 10 brands have been outperforming the total business unit's organic sales growth year-to-date by around 300 basis points, driving a continuous increase in the sales share, which now accounts for around 60%. We will continue to invest in innovations and in brand equity. And in this context, tech-driven innovations are key in order to enhance the valorization of our portfolio in Consumer Brands and drive further top line growth, and we are keeping up with the appropriate investment levels behind our brands in order to fuel further growth.

And now turning to our full year outlook. The guidance ranges remain unchanged. We continue to expect that both the adjusted EBIT margin as well as the adjusted EPS growth at constant currency will be well within our current outlook ranges. However, in case there is no noticeable improvement of the economic environment until year-end, organic sales growth for the group is expected to come in at the lower end of our current guidance range. This would, by the way, already broadly correlate with current consensus expectations.

And with this, a good moment now to hand over to Marco, who will lead you through the key financials in more detail. Marco?

Yes. Thanks, Carsten, and good morning to everyone in the call also from my side. Bidding on what Carsten already shared, let me provide some more color on the drivers of the group sales performance in the third quarter of fiscal 2025. We achieved organic sales growth of 1.4%, which was driven by positive volume development, while pricing was stable and more on the business unit related specifics, certainly in a minute. Acquisitions and divestments reduced sales by 2.9%, reflecting the recent divestment of our retailer brands business in North America. FX was a headwind of minus 4.8% in the third quarter, reflecting, in particular, the weaker dollar and the related currencies. In nominal terms, sales amounted to EUR 5.1 billion, thus 6.3% below the prior year.

Now to the drivers in the respective regions. Starting with Asia Pacific, where we achieved very strong organic sales growth of plus 4.9%. The Adhesive Technologies business delivered a very strong increase, which was particularly driven by the continued growth dynamics of our Electronics business in China. The Consumer Brands business recorded positive growth, which was fueled by very strong growth in Hair. India, Middle East, Africa showed double-digit growth of 10%, and that was supported by both of our business units.

In Latin America, sales were below prior year due to weaker performance in Adhesive Technologies. In contrast, Consumer Brands reported positive growth driven by a very strong increase in Hair. In Europe, sales came in at minus 2%. Adhesive Technologies was slightly below the prior year. And while Craftsmen, Construction & Professional achieved positive growth, Mobility & Electronics as well as Packaging & Consumer Goods were down year-on-year. Consumer Brands recorded a negative development, reflecting the continued challenging market environment, particularly in the Laundry & Home Care, while Hair showed good growth.

Moving on to North America, where we achieved good growth of 2.3%, a clear sequential improvement versus Q2. This was supported by both of our business units. The good development in Adhesive Technologies was driven by Mobility & Electronics as well as Craftsmen, Construction & Professional. The Consumer Brands business also reached good growth, which was fueled by a very strong increase in Hair while Laundry & Home Care came in flat. The Professional business also grew very strongly, reflecting a clear improvement in the region.

Turning now to Adhesive Technologies in more detail. We reached sales of EUR 2.7 billion in the third quarter of fiscal 2025. Organic sales growth was 2.5% with positive pricing and good volume growth, which was supported by a partial reversal of the negative working day impact, which we had faced in the first half of the year. As expected, Adhesive Technologies showed a sequential improvement with good organic sales growth in Q3 in a still demanding environment. Pricing remained in positive territory, which again reflects the strength of our market position globally and the broad portfolio serving a broad variety of different industries.

We saw the highest volume growth in Q3 when comparing this year's quarters within a still demanding market environment, albeit being supported by a partial reversal of the negative working day impact, which had impacted volumes in the first half. Regarding the remainder of the year, we expect volumes to remain in positive territory, while pricing is expected to remain robust.

Let me now turn to the performance in the individual business areas, where we saw different dynamics. Mobility & Electronics was again the main growth driver with a very strong increase of 5.9%. This increase was mainly driven by continued double-digit growth in Electronics and very strong growth in Industrials. This could more than offset the still muted performance in Automotive, where we continue to see a challenging market environment. Packaging & Consumer Goods came in slightly below prior year. And while Consumer Goods showed positive growth, Packaging was negative due to overall lower demand. Craftsmen, Construction & Professional delivered organic sales growth of 2.2%, and that was fueled by strong growth of manufacturing and maintenance, good growth in Construction and positive development in Consumer and Craftsmen.

Now moving to Consumer Brands. The business generated sales of EUR 2.4 billion, organic sales growth came in at 0.4%, driven by positive volume development, while the overall pricing effect was negative. In Q3, volume development returned to positive territory, marking a strong sequential improvement and driving positive organic sales growth. Pricing was slightly negative, particularly due to Laundry & Home Care, which also reflects the currently challenging environment with regards to consumer sentiment, while pricing in Hair was in positive territory. Encouraging to see was a sequential acceleration of organic sales growth in North America, which was also mainly driven by Hair. Last but not least, we will continue with our strong investments behind our brands to fuel growth.

Now turning to the performance by business area. Laundry & Home Care reported organic sales growth of minus 1.5%, reflecting a challenging market environment. Home Care posted an overall stable development with still very strong growth in the Dishwashing category. Laundry Care was negative due to fabric cleaning, while Fabric Care delivered double-digit growth supported by top brands such as Perwoll. What clearly stood out within Consumer Brands was the very strong growth in Hair, which was driven by both the Consumer and the Professional business. The very strong growth of the Consumer business was driven by coloration and styling. Our professional business also grew very strongly, supported by a clear improvement in the North America region. Organic sales growth in other Consumer businesses remained below the prior year due to Body Care in North America and Europe.

As Carsten already mentioned earlier, the ranges of our sales and earnings guidance for 2025 remain unchanged. We continue to expect that both the adjusted EBIT margin for both the group as well as the 2 business units as well as the adjusted EPS growth at constant currencies will be well within our current outlook ranges. However, in case there is no noticeable improvement of the economic environment until year-end, organic sales growth for the group as well as for both business units is expected to come in at the low end of our current guidance ranges. This would, by the way, already broadly correlated with current consensus expectations. Our expectations regarding foreign exchange, acquisitions and divestments impact direct material prices, restructuring expenses and CapEx for fiscal 2025 remain unchanged.

With that, back to you, Carsten.

Marco, thank you so much. I would like to conclude today's presentation by summarizing the key highlights of the quarter. First, we saw a clear acceleration in our top line development with both business units recording positive organic sales growth in the quarter. Adhesive Technologies continues its trajectory of consistent robust growth despite the challenging environment we are navigating. Consumer Brands reached positive volume development in Q3 and positive organic sales growth. The merger is in its final stages, and we will successfully conclude it by end of the year. And with that, clearly ahead of plan compared to what we had originally expected when we started this journey. And from a regional perspective, North America stood out with good organic sales growth supported by both business units.

Second, also encouraging to see is the continued strong gross margin and bottom line development. Third, in regards to our share buyback, we are well on track having executed around EUR 700 million at the end of October. And finally, when it comes to our full year guidance, the ranges remain unchanged.

And with that, back to the moderator for the Q&A.

[Operator Instructions] Our first question comes from Guillaume Delmas from UBS.

I've got a couple of questions, both on Consumer Brands. The first one is on pricing development in the quarter because it turned suddenly negative. So maybe to start with, is it something you had been planning for some time? Or was it more in reaction to a more challenging consumer maybe competition environment? And from a category and region point of view, was this negative pricing quite broad-based or just mostly down to a few specific country category combinations. And lastly on this, what would be the outlook? So as in negative pricing to stay in the coming quarters? Or was this just a one-off?

And then my second question is on your 2025 guidance specifically for Consumer Brands organic sales growth. So you flagged low end of the organic sales growth range likely. But even the low end of the range would imply a mid-single-digit performance in Q4. That would be a very significant sequential acceleration. So just wondering what the drivers should be for this marked Q4 step-up? And if what you achieved in October supports this mid-single-digit organic sales growth ambition?

Guillaume, that was more a speech than a question, but happy to take the question. So we start with your pricing topic. I will take that and Marco will then take the question related more to the guidance also related to the top line. So let's get started on the first one.

So first of all, Guillaume, we had really a good Q3 in HGB with really positive volumes. You know that's the first time in this year. And we have seen really a sequential improvement. As also projected, we started with a minus 5% we had in Q2 the minus 1%. We are now at plus 1%. And therefore, I think we can be really happy with that development first. And second, we also expect that the Q4 will be stronger than the Q3, not only related only to volume, but also especially related to the total OSG in that context.

For sure, there is a pricing which is negative in the quarter, but we should not only look at 1 quarter because if you look at the pricing year-to-date, we are with pricing year-to-date in positive territory, and we also expect pricing to remain positive -- in positive territory for the full year. So we will not guide on a specific quarter between price and volume. But as I said, that is very clear. The pricing now specifically maybe to Q3, why is the pricing lower? It is particularly more related to Laundry, so not to all categories because that was also part of your question within our portfolio. Home, Hair, be it Consumer, be it Professional is in the territory of neutral to positive when it comes to pricing.

So in that context, this is more Laundry related. And within Laundry, it is also more Europe related. You may have -- you noticed that and you know that after, I would say, a little bit better consumer sentiment in Q2, the consumer sentiment, especially turned down again in Q3, and that is also related to the consumer behavior. And in Europe, you know that private labels are more outspoken. And in that context, that was for sure was a little bit more there. And on top, the market overall in Laundry was negative, not related to Henkel, but in the overall context.

And yes, we also took normally, which was also planned. As we said, second half will be stronger than first half. That was not only related to top line but also related to innovations and also customer-related activities. So therefore, we have also some selected promotions, which are more outspoken in the second half than in the first half, but this is -- because you also had the question, is it planned or reactive? That is, as I said, already we planned because we talked already about that at the beginning of the year.

And on top, as it's also very clear, there is no change in our valorization strategy. I think that is something which is part of our strategy since the beginning. I think I have highlighted that also again today with the example of Perwoll where we, based on the valorization took quite significant also price increases. And we are confident that we have a good portfolio. I alluded to our top 10 brands and the percentage around 60%. And the good growth, not only in an individual quarter but also year-to-date with a good balance of price and volume.

I stop here. And in that context, now I hand over to Marco because your second question was related to the overall outlook for top line for the full year, respectively, for quarter 4. Marco, please.

Yes. So to the drivers of Q4, what we assumed here. So first, you need to see that we do have easier comparables in the fourth quarter when you then compare that in particular also with Q3 and the quarters before that. So comps is one topic. And then as we highlighted earlier, we're going to -- we do see more of our innovations hitting the second half of the year, and we said that also before, that is even more geared towards the fourth quarter. So also here, assumption around our strong launch and relaunch activities is behind. So we have activities going on for Vidal Sassoon in China, for example, or even in Persil, we talked about the Giant Discs and also around activities of Perwoll and Gliss. .

And promotional activities is the next driver, of course, that we start to accelerate. So should see also more traction on that in the fourth quarter. And then also some pricing that we do expect in Q4, especially in emerging markets. Of course, there's still a lot of volatility around, and we talked about the consumer sentiment volatility earlier, and that's why we did also flag uncertainties around that.

The next question comes from Patrick Folan from Barclays.

Just going back to the question on promotional activity stepped up in the period. Should we expect this to be something that comes through more in Europe in Q4 and maybe in 2026? And I guess, sticking with kind of Consumer on -- we're looking at October, I'm under the impression that you had some launches that came out in the period. How have they gone? Or do you have any exit rate on the performance within those launches? And just sticking within Consumer, you talked about the top 10 brands making up 60% of your portfolio, which you guys have been talking about throughout this year. Can you maybe share some color on how you plan to improve the remaining 40%? What are the drivers there to get that improving to drive the overall portfolio forward?

Patrick, so to the first one, as I mentioned before, we had already planned, as I said, that the second half should be more outspoken in terms of top line than the first, which was mainly related to our activities, which we had planned and where we clearly stated these are more back-end loaded means more pronounced in Q3 and Q4, and that's also happening. That's also the point that we have seen also a better volume development in Q3. And again, I said it's selective promotions. There is no strategy change. And for sure, this is related to the innovations we are taking in Q3 and Q4 and in order to support that, we have done that.

For 2026, because that was also your question, please understand that I'm not talking today about that. We are -- for sure, we have clear ideas and plans how to do that, but I would like to state a little bit on that when we are beginning of the year in terms of announcing also the guidance for the year in that part.

The second part of your question was related to the top 10 brands. First of all, yes, we are investing quite significantly behind the top 10 brands, means investments in R&D, means investments in marketing. Consequence is, for sure, focus on innovations related to the top brands. They also continued in Q3 to deliver above-average growth. And as you mentioned rightly, the sales share has significantly increased over the last years, and we will work continuously to increasing that top 10 brand share also in the future.

When it is related to the other 40%, I think part of that is also related to our portfolio strategy. And I said that we have certain categories which is mainly related to our Body Care part in the -- besides the top 10 brands, which is core, but it's not the investment case. It is in a clear portfolio, more a cash cow. And in that context, it delivers quite significant support when it comes to gross margin, absolute gross margins in order to invest in our focus areas. And therefore, that part will always remain.

And for the other part, it is like we have done that now over the last couple of years. We look at our portfolio constantly. And if there is no change in performance, we will take respective measures as we have taken, I would say, very clear and straightforward in the last couple of years. And on top, you know that the Laundry segment is currently facing a more pronounced competitive environment, also related to the point I made before that the market overall is negative in the context of the consumer sentiment, which is impacting consumer behavior, which is also a more trend in the direction to private label-oriented brands. But from my point of view, as I always pointed that out, that's a temporary development. If sentiment comes back, I would significantly see then also a shift again towards the branded labeled businesses.

Just following up on that, just on private label. Can you maybe share where you're seeing the pressure in private label? Is it mainly Europe or any countries specifically you want to call out?

No, as indicated before, it is predominantly in Europe. The private label share in Europe is around 20%, and that's something which you don't see in any other region in the part when it comes to Laundry, yes, that is pure Laundry.

The next question comes from David Hayes from Jefferies.

So my question is on the margin but short term and long term. So just on the short term, you look at the Consumer challenges that you talked about. And so the beginning of the year, you were thinking Consumer could do up to 3% organic. Now you're targeting 0.5%, but you're still well within -- as you said in the release, well within the ranges on margin and earnings. So just trying to understand what is offsetting that challenge, particularly on pricing, how is the margin still well within the ranges that you started with at the beginning of the year?

And then I guess, secondly, on the longer-term on margin, are you still confident with these pricing pressures that the trajectory hasn't changed to get to 16% plus as you've talked about previously? Or these challenges continue, is that something that you'd have to kind of capitulate on and take longer to get there?

So related to the short term, I think what we clearly said today is that we are confident in both businesses for the margin situation that we will be well within the ranges we have been setting up. And the main reasons behind that is predominantly in the Consumer space, it is the net savings we are taking out of the merger situation where I clearly pointed out, we will at least reach the EUR 525 million until the end of the year. A year earlier than expected. That does not mean that in '26 there will be nothing more coming. I'm only saying, we know we reached it significantly earlier. We have efficiency gains in both divisions when it comes to the production setup, the supply chain setup, which we are predominantly driving, again, also in the second phase of the merger, but also relevant for our Adhesives business.

And the valorization part is also very clear. I mentioned it before, valorization brings a significantly higher gross margins. But the good thing behind is that we can invest significantly more behind our brands. And by that, also looking now to your long-term question, bringing our long-term, I would say, investment in terms of brands into the right direction. And last but not least, it's the mix effect, which is also again valid for both businesses. In the context of Consumer, it's more related to the really fantastic development in Hair, in Consumer and in Professional. And in Adhesives, for sure, I was relating to the Electronics part not only for today, but also the prospects into the direction of 2030.

So all of that is not only related to short term, but also to long term or better to say midterm, that we will reach the margin of around 16%, which we, I would say -- not that I would say, which we concluded in 2024 that we will reach that to a midterm means 2 to 4 years, average is 3 years. So we are on the right track. And if you look over the last couple of years of our margin development is continuously improving that.

The next question comes from Christian Faitz from Kepler Cheuvreux.

A couple of questions, please, from my side. In Adhesives, would you see any remarkable sales or order trends at this point in time in Q4 that your salespeople are suggesting that are different from Q3, i.e., pickup in Automotive demand or something like that?

And then on the Consumer side, I mean, I understand the negative trend in Laundry, consumers trading down to private labels, particularly in Europe. But certainly, congrats on the strong results in Hair within Consumer. But why are Consumers not trading down also on Hair? Or is that really your innovative portfolio versus a lower base that's driving that?

Christian, thank you for these 2 questions. I take the second one, which is related to your Consumer part. And I'll let Marco talk about the Adhesives part in terms of when you said the sales and the order trends in Q4 if they are different to Q3.

So when it comes to Consumer, I cannot -- sometimes it's difficult to talk about history. But the Laundry segment, at least since I'm in business, and that's now since 30 years, that was always the situation that in that context, private label was, yes, especially in difficult times, quite strong or existing. Why is it not in here? Difficult to predict. The main reason, I would say, is for sure, the situation that, especially if you think about color, coloring your hair and also styling your hair, you are visible outside or from the outside. And I think that's something where people have a lot of loyalty and also want to have a lot of security and certainty that what you would like to see yourself on your body is -- or in that context on your head on your hair is something where you have security that you get the results you want.

And on top, coloration is not an easy thing from a technology perspective and therefore, also quite high entry barriers to get into that business. That has also been the case that you don't see private labels even not being able to get into that technique or technology. That's -- this is for me, the major reason why you don't see that in these categories. And therefore, we are more than happy and also lucky that we are in the Hair business. That we're one of the, I would say, most outspoken worldwide players in that context being the clear -- now in the meantime, the clear #2 in the professional business of hair after a company which is located in Paris or in France. And I think we will continue to drive that trend and also very happy with the current results with over proportional growth.

I would say I stop here and hand over to Marco for the Adhesive question. Marco?

Yes, Christian, to your first question on Adhesives and sales trend. I mean, it's clear we said it's a very volatile environment. So that's why sometimes we say what is the trend is not easy to say. But when you look at the group, what has remained very strong over the whole year, that is, of course, the Electronics part, and that has developed very nicely and the more difficult environment, for sure, we face in the Automotive sector. And from that perspective, the trend is not what we see very much different beginning of the Q3, but also we just are in the beginning of the Q3, quite obviously.

And when you look at those trends, also now looking more then, of course, longer into the future, you see also that general trend hasn't much change yet. So still the volatility and uncertainty is seen also in the industrial markets. When you look also at the IPX forecast for 2026, for example, at the moment, IPX is expected to come in at around 1.7%. If that is so, that would be even below the level of 2025. But we also know that the IPX also is very volatile in the expectation, but that shows also at the moment, it's very difficult to identify a clear trend. And even for 2026, it's supposed to be a muted industrial environment for the time being. And the same is in particular true for the sub-index of the light vehicle production index for 2026.

On the other hand, I see no indication that Electronics and also our Industrial business environment shouldn't continue to grow. So these trends even seem to persist until into 2026. We are in overall, of course, confident on our performance of the teams and see also the resilience of our businesses. And in so far, of course, we're going to make up our mind beginning of next year, how that will evolve together with also the latest news on consumer sentiment that, of course, we will then look at and come out like always with the guidance for next year in March.

The next question comes from Tom Sykes from Deutsche Bank.

Just 2 quick ones. One on the Adhesives business. How big now is the services side of the business? Or if you like, the total that's kind of non-strictly volume related and what's the growth of that be, please?

And then just is it possible to expand a little on your productivity comments in Consumer because obviously, you have had this outsized productivity gain. Do you think the setup now is something which you can produce year in, year out, slightly higher productivity than you did do prior to the merger? Or is it a period where you do get some productivity gains, but they may be a little lower because you brought some of those forward, please?

So to your first question, Adhesives, I assume when you talk about services, you mean or you relate that to the point where we have now significantly invested in the last 1.5 years in the so-called MRO business, maintenance, repair, overall business. If you look at that, it's around 20% of the business overall. And what is for me very promising, we bought these 2 companies, Critical Infrastructure and Seal For life, I think on 2 reasons. First of all, to create a new category for us. We had a certain business on that, but we wanted to make it significantly bigger. This we reached with that. That's one. But the even more important question is we are here for our purposeful growth agenda, means we want to overproportionately grow. And I think that is happening.

Both acquisitions, if we take them together, year-to-date are growing double digit. And I think that is in the context of where we are in. You just heard Marco describing the industry sentiment with an IPX of around 2% in this year and also not a significantly different situation of next year with currently a forecast of 1.7. I think it's very good to have these outstanding categories like MRO, but also like Electronics in that context. So that's for your first question.

The second one was related to productivity gains, especially in the Consumer business. Here the point is that we did quite a lot in the last couple of years. You know that we splitted our EUR 525 million in 2 phases, EUR 275 million related to phase 1 and around EUR 250 million in phase 2. And I mentioned it before, we are not only well underway. We're really, really over-delivering on that. And we expect, for sure, also further gains. But of course, for sure, in a lower dimension as in the last couple of years. And I mentioned before, even for 2026, we will significantly be higher than the EUR 525 million what I mentioned before.

And therefore, it's really -- we are really on a good track record when it comes to creating additional savings on that. We have around 40% SKU reduction. We have more than 20% of complexity reduction, taking SKUs out, streamlining the processes. And we will also, in the next couple of years, benefit from that part. As I mentioned before, you cannot expect the same pace in the context of what we did since 2023.

The next question comes from Mikheil Omanadze from BNP Paribas.

I have 2, please. First, could you please maybe provide some color on the strong Hair delivery and quantify retail and salon growth. Was there anything of one-off nature helping during the quarter? Was there maybe some moves of inventories at retailers or distributors which helped that strong number?

And the second question would be on raw materials. As we look into 2026, are there any noteworthy moves on your key inputs that we need to be aware of?

Yes. So I take the first question related to Hair and Marco takes the second on the raw materials. So I mentioned it before when I talked in the context of Tom's question. So the Hair business is really a fantastic business we have at hand. For sure, we don't know that only since today, but really that was also in our portfolio discussions, one of our key focus areas and by that, trying to get our global category lead in Hair further improved. You're specifically asking for the current performance. So the Hair business showed a significant sequential acceleration versus Q2, reaching a very strong growth in the quarter, above 4%.

The Consumer business posted a very strong growth in Q3 with the strongest contribution from color and styling as the 2 categories. Styling was very strong in Q3, especially driven by Europe and a double-digit growth in North America and hair colorants same with significant growth in Europe and double-digit growth in EMEA. So that is the one. The Professional business, also a very strong quarter in Q3 where almost all regions were contributing positively. And we were -- and we saw a very strong growth in North America and double digit in LatAm.

And I have to tell you out of my personal travels, I recently visited our U.S. Professional business in Los Angeles, where the headquarter is and which stands for a significant part of our Professional business worldwide. And I can only tell you, we're working here with a couple of brands, but it's really a great brand setup, a great setup overall. And I'm really very confident that's also what I would like to get across that this business is not only good today, but there's also a very bright future going forward. And as you know, we have over proportionately gross margins on that business, which is also very helpful in our portfolio transformation or in our valorization strategy. So I'm very positive about that with a very strong performance also today or year-to-date.

Hope that helps, Mikheil, and now hand over for your second question when it comes to raw materials.

Yes, to raw materials, is sure the volatility in the market is strong. So there's some caveat to, of course, what we do see for next year. But broadly, what trends we see is for 2026 somewhat similar to this year. We see on the petrochemical feedstock side, that shall remain rather flat. So no significant increase, no significant decrease. While on the other hand, natural feedstocks for example, palm kernel oil, we expect a rather upward trend also to continue into 2026. .

And then on the precious metal side that -- where we have seen quite some upward trends and that may continue. That is was suggested by the expert opinions for the time being. But I also need to point out that on the precious metal side, that is rather a pass-through on our end, so will not impact really our margin. So that's what we currently see for the market.

And with that, let me thank you for your questions. And let me also close today's call with reminding you of the upcoming financial reporting dates. We are looking forward to connecting with you again in March, to be precise, 11th of March when we will publish our annual report.

And with this, we would like to thank you, in the name of Leslie and also Marco, to thank you for joining our call today. Have a good day. Take care, and goodbye.

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